The Pinterest Stock Fell After a Dramatic Sell-off as Analysts Defended, Citing Positive Trends

Pinterest Stock

Pinterest Stock (NYSE:PINS)

After reporting its results for the fourth quarter, Pinterest (NYSE:PINS) had a strong sell-off in extended-hours trading. However, the image-sharing social network recovered from this drop as Wall Street companies came to their defense and cited increasing trends.

The analyst at Wells Fargo named Brian Fitzgerald, who has an overweight rating and a per-share price target for the Pinterest stock, cited the increasing monetization stock and engagement metrics as reasons to be optimistic. Also, according to Fitzgerald, “sessions expanded faster than users,” and the ratio of weekly active users to monthly active users touched a record 61%.

Fitzgerald noted that “Macro remains hard and [near-term revenue] forecast is below our earlier projections,” but that “Pinterest” looks to be well positioned as a macro business. He cited the previously reported success in engagement, “strong” Generation Z trends, the improvement in sessions and monetization, and sustained work on shopping and expenditures.

Analyst Brian White from Monness, Crespi, and Hardt was a bit more cautious and reiterated the firm’s neutral rating. However, he did highlight that the business has made gains in the cost structure and progress in acquiring consumers.

White said in a note to clients that the conference’s tone was “mixed,” with Pinterest stressing greater engagement on the platform, a leaner cost structure, and weak trends in digital ad expenditure. “The tone of the call was mixed,” White wrote.

Nevertheless, White said that Pinterest (NYSE:PINS) anticipates its EBITDA margin will “meaningfully rise” this year due to its ongoing efforts to cut costs and its more conservative approach to spending.

Midday trade on Tuesday saw Pinterest stock fall by 2%.

In addition to the financial results for the fourth quarter, Pinterest (PINS) announced that its Chief Financial Officer, Todd Morgenfeld, would be leaving the firm and that it would initiate a stock buyback program for $500 million.

Featured Image: Pexels @ Brett Jordan

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