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Pinterest (PINS) to Report Q1 Earnings: What's in Store?
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Pinterest (PINS - Free Report) is set to report first-quarter 2020 results on May 5.
The Zacks Consensus Estimate for the first quarter currently stands at a loss of 8 cents per share, narrower than a loss of 10 cents per share a month ago.
The consensus mark for revenues is pegged at $270.47 million, indicating an increase of 33.9% from the year-ago quarter.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average negative surprise being 7.7%.
Let’s see how things have shaped up prior to this announcement.
Preliminary Q1 Results Indicate User Base Growth
Pinterest announced preliminary first-quarter 2020 results. The company expects global monthly active users (MAUs) in the range of 365 million to 367 million. Of this, the United States accounts for 89-90 million, while the rest of the world accounts for 276-277 million.
Moreover, Pinterest expects preliminarily revenues between $269 million and $272 million. Further, the company ended the first quarter (as of Mar 31) with roughly $1.7 billion in cash, cash equivalents and marketable securities, no financial debt, and an undrawn $500 million revolving credit facility.
Pinterest withdrew its 2020 revenue and adjusted EBITDA margin guidance that it had issued on Feb 6, citing adverse impact of the COVID-19 outbreak on its advertising revenues.
Factors to Consider
Pinterest’s initiative to improve user engagement by introducing Pinterest Lite, especially in countries such as Peru, Argentina, Colombia, Chile and Mexico among others is expected to have accelerated conversion of searches into product purchases in the first quarter.
Additionally, the company’s expansion in nine additional countries, including the UK, Ireland, Canada, Australia, Singapore, India, the Philippines, Hong Kong and New Zealand is expected to have contributed to international user base growth in the to-be-reported quarter, thus boosting the top line.
Moreover, the company’s healthcare initiatives during the first quarter are likely to have aided user growth and engagement levels.
In the fourth quarter, MAUs Global increased 26% to 335 million. While United States MAUs increased 8% to 88 million, International MAUs soared 35% to 247 million.
Pinterest introduced a Today tab with curated topics and trending Pins to inspire Pinners to explore popular and timely ideas including expert information from the World Health Organization and Centers for Disease Control on topics like hand washing and other precautionary measures amid the coronavirus epidemic.
Moreover, Pinterest also collaborated with American Academy of Pediatrics to bring their resources for parents to its platform.
New Verified Merchant Program launched with retailers like Quay Australia, Ruggable, Filson, Coyuchi and Lotuff Leather among others displays a special blue checkmark on their profiles, and provides eligibility for increased distribution within high-intent shopping experiences and metrics like conversion reporting. This is expected to have increased advertisers on the platform, thus driving average revenue per user (ARPU) in the to-be reported quarter.
Additionally, a dynamic retargeting feature to reach Pinners who unpurchased items or previously engaged with the brand, catalog updates including new metrics, near real-time feed ingestion, user experience enhancements, and feed ingestion scheduling are expected to have improved advertiser engagement and experience of the platform.
Further, internalizing ads business, simplifying ad systems for smaller businesses and improving advertisers’ ability to measure the effectiveness of their ad spend are expected to have driven advertiser growth in the first quarter.
However, Pinterest generates revenues primarily from one source — advertising. Drop in advertising demand due to coronavirus-led business lockdown across the globe and increasing competition for ad dollars from the likes of Facebook, Amazon, Google and Twitter are expected to have been the major headwinds for the company in the soon to-be reported quarter.
Moreover, rapid growth in international user base is expected to have hurt ARPU in the to-be-reported quarter as monetization rate has been low in international markets.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Pinterest has an Earnings ESP of -3.03% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Pinterest (PINS) to Report Q1 Earnings: What's in Store?
Pinterest (PINS - Free Report) is set to report first-quarter 2020 results on May 5.
The Zacks Consensus Estimate for the first quarter currently stands at a loss of 8 cents per share, narrower than a loss of 10 cents per share a month ago.
The consensus mark for revenues is pegged at $270.47 million, indicating an increase of 33.9% from the year-ago quarter.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average negative surprise being 7.7%.
Pinterest, Inc. Price and EPS Surprise
Pinterest, Inc. price-eps-surprise | Pinterest, Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Preliminary Q1 Results Indicate User Base Growth
Pinterest announced preliminary first-quarter 2020 results. The company expects global monthly active users (MAUs) in the range of 365 million to 367 million. Of this, the United States accounts for 89-90 million, while the rest of the world accounts for 276-277 million.
Moreover, Pinterest expects preliminarily revenues between $269 million and $272 million. Further, the company ended the first quarter (as of Mar 31) with roughly $1.7 billion in cash, cash equivalents and marketable securities, no financial debt, and an undrawn $500 million revolving credit facility.
Pinterest withdrew its 2020 revenue and adjusted EBITDA margin guidance that it had issued on Feb 6, citing adverse impact of the COVID-19 outbreak on its advertising revenues.
Factors to Consider
Pinterest’s initiative to improve user engagement by introducing Pinterest Lite, especially in countries such as Peru, Argentina, Colombia, Chile and Mexico among others is expected to have accelerated conversion of searches into product purchases in the first quarter.
Additionally, the company’s expansion in nine additional countries, including the UK, Ireland, Canada, Australia, Singapore, India, the Philippines, Hong Kong and New Zealand is expected to have contributed to international user base growth in the to-be-reported quarter, thus boosting the top line.
Moreover, the company’s healthcare initiatives during the first quarter are likely to have aided user growth and engagement levels.
In the fourth quarter, MAUs Global increased 26% to 335 million. While United States MAUs increased 8% to 88 million, International MAUs soared 35% to 247 million.
Pinterest introduced a Today tab with curated topics and trending Pins to inspire Pinners to explore popular and timely ideas including expert information from the World Health Organization and Centers for Disease Control on topics like hand washing and other precautionary measures amid the coronavirus epidemic.
Moreover, Pinterest also collaborated with American Academy of Pediatrics to bring their resources for parents to its platform.
New Verified Merchant Program launched with retailers like Quay Australia, Ruggable, Filson, Coyuchi and Lotuff Leather among others displays a special blue checkmark on their profiles, and provides eligibility for increased distribution within high-intent shopping experiences and metrics like conversion reporting. This is expected to have increased advertisers on the platform, thus driving average revenue per user (ARPU) in the to-be reported quarter.
Additionally, a dynamic retargeting feature to reach Pinners who unpurchased items or previously engaged with the brand, catalog updates including new metrics, near real-time feed ingestion, user experience enhancements, and feed ingestion scheduling are expected to have improved advertiser engagement and experience of the platform.
Further, internalizing ads business, simplifying ad systems for smaller businesses and improving advertisers’ ability to measure the effectiveness of their ad spend are expected to have driven advertiser growth in the first quarter.
However, Pinterest generates revenues primarily from one source — advertising. Drop in advertising demand due to coronavirus-led business lockdown across the globe and increasing competition for ad dollars from the likes of Facebook, Amazon, Google and Twitter are expected to have been the major headwinds for the company in the soon to-be reported quarter.
Moreover, rapid growth in international user base is expected to have hurt ARPU in the to-be-reported quarter as monetization rate has been low in international markets.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Pinterest has an Earnings ESP of -3.03% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Mattel, Inc. (MAT - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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