Tech Stock to Watch: Pinterest Inc (NYSE: PINS)

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Pinterest Inc (NYSE: PINS) stock rose 3.52% on September 15th, 2020 (Source: Google finance) after KeyBanc analyst Justin Patterson initiated coverage with an Overweight rating and price target of $44. The stock fell over 1.8% on September 16th, 2020 (as of   11:31 am GMT-4; Source: Google finance).

Meanwhile, the company has terminated its office lease for approximately 490,000 square feet to be constructed at 88 Bluxome St. near its current headquarters campus. Now, the company plans to continue leasing its current downtown buildings in order to underpin a more diverse and geographically distributed workforce. The agreement involved a one-time payment of $89.5 million in third quarter 2020. This will be reflected in Pinterest’s financial statements as a GAAP general and administrative expense to be filed with its quarterly report on Form 10-Q for the period ended September 30, 2020. As a result of the termination, Pinterest will no longer be subject to future minimum lease payments of about $440 million as disclosed in prior filings.

On the other hand, for the second quarter of 2020, the company’s revenue grew 4% year over year as advertiser demand continued to be affected by the COVID-19 pandemic. Total U.S. revenue was $232 million, which reflects a decline of 2% year over year. U.S. revenue declines were due to ARPU compression. Total international revenue was $41 million or 15% of revenue, which reflects an increase of 72% year over year and compared to 9% of revenue in Q219. International revenue growth was due to an increase in MAUs and supported by growth in ARPU. The company has reported Non-GAAP net loss of $(38) million, or (14)% of revenue, compared to a loss of $(25) million, or (9)% for the same period in 2019. The company delivered the adjusted EBITDA of $(34) million, or (12)% of revenue, compared to the year-ago quarter Adjusted EBITDA of $(26) million, or (10)% of revenue. The company’s EBITDA margin was down year over year on the back of a deceleration in revenue growth partially offset by lower total investment growth. The company has ended the quarter with approximately $1.70 billion in cash, cash equivalents, and marketable securities.

Global MAUs rose 39% year over year to 416 million. MAU growth accelerated in both the US and international geographies as people sought inspiration and information to navigate the challenges wrought by the COVID-19 pandemic. MAUs at quarter-end were 416 million, reflecting the growth of 39% year over year.

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