Pinterest Inc (NYSE: PINS) stock nosedives on weak outlook

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Pinterest Inc (NYSE: PINS) stock lost over 11.6% on17th May, 2019 (As of 12:21 pm GMT-4; Source: Google finance)

The company gave an unimpressive full-year 2019 revenue forecast. The company’s net loss has narrowed to US$41.4 million in the quarter ended March 31 from US$52.7 million a year earlier. Excluding certain items, the company lost 32 cents per share, wider than analysts’ projected loss of 10 cents a share.

Pinterest also said in a regulatory filing it would look to invest in its advertising products through the year. The company, which calls its users “pinners”, added 291 million monthly active users globally in the first quarter, above estimates of 289.3 million, according to IBES data from Refinitiv. ARPU globally rose 26per cent to 73 cents

The company had reported the adjusted revenue growth of 54 percent to $201.9 million in the first quarter of FY 19, beating the analysts’ estimates for revenue of $200.6 million. The company has healthy user growth, 22% to 291 monthly active users.

The company expects full-year 2019 revenue to be  between US$1.055 billion and US$1.08 billion, the mid point of which is slightly above analysts’ estimate of US$1.06 billion, on the back of average revenue per user (ARPU) in the United States.

Meanwhile, the company is opening up new international markets. The company has increased the number of markets that we’re in now from 7 to 13, and is also trying to diversify the advertiser base by investing in self-service tools that will yield results both in the US and internationally. The company’s international advertising business, which made up just 7% of Pinterest’s quarterly revenue despite people overseas making up about 71% of Pinterest’s monthly users. Finance chief Todd Morgenfeld said that while Pinterest is investing heavily to build out its international sales force, he “wouldn’t expect material financial results to accrue to the company’s benefit until 2020.”

On the other hand, Pinterest had been a bright spot in the tech industry’s rocky IPO season, in which highly expected public offerings from ride-hailing startups Uber Technologies Inc. and Lyft Inc. have disappointed. Pinterest’s stock surged 28% in its first day of public trading on April 18, and closed at $30.86 on Thursday, 62% higher than its IPO price. The stock fell as low as $24.74 following the report.

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