The San Francisco-based company late Thursday posted a better-than-expected 43% increase in third quarter earnings, to 40 cents per share, and sales increase of 18% to $898 million. However, the issue for some investors is that revenue growth for Q3 hardly met expectations, with guidance for the fourth quarter sales growth of 15% to 17% being seen as uninspiring.
Worryingly for investors, the implied guidance would mark the third quarter in a row of decelerating revenue growth and already puts Pinterest at the lower end of their mid-to-high teens 3-5 year revenue growth guidance shared at their Investor Day 14 months ago,
The post-earnings sell-off continues a rocky year for Pinterest stock, which kicked off with a 21% rally through late June, only to tumble after disappointing Q2 results in July, and subsequently remain nearly 40% off the highs from late June.
The bull case for Pinterest bet the company's new leadership can draw on users looking for fashion tips and home-design inspiration to sell more e-commerce ads, focusing on making Pinterest more 'shoppable' over the past two years.
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