Pinterest climbs 13% on upbeat preliminary guidance for the first quarter

Pinterest climbs 13% on upbeat preliminary guidance for the first quarter

  • Pinterest jumps 13% on upbeat preliminary guidance that tops analysts' estimates.
  • The social media company expects to generate £218 million to £220 million in revenue in Q1.
  • Pinterest withdrew its full-year guidance as Coronavirus weighs on its global advertising revenue.

Pinterest (NYSE:PINS) released its preliminary guidance for Q1 that topped analysts’ forecast on Tuesday. Following the announcement, Pinterest was reported trading 13% up in extended trading.

According to Refinitiv, analysts estimate the company to print £216 million in revenue in the first quarter. As per Pinterest’s early guidance, however, the company expects to generate £218 million to £220 million in revenue in Q1.

But Refinitiv also highlighted that experts’ forecast has not been updated after the Coronavirus pandemic and the associated restrictions that are drastically changing the global economic activity.

FactSet Analysts Estimated £204.50 Million In Q1 Revenue

Analysts surveyed by FactSet last month anticipated a much lower £204.50 million in revenue for Pinterest in the first quarter. As evident, the California-based social media company beats the FactSet’s estimate by a significant margin as per its preliminary guidance for Q1.

As per Pinterest’s statement on Tuesday:

“First-quarter revenue performance was consistent with our expectations through the middle of March, when we began to see a sharp deceleration. Fortunately, despite weakness across nearly the entire advertising market, our exposure to some of the most affected segments like travel, automotive, and restaurants has not been significant.”

Pinterest also said that its users that are active on the platform every month also grew sharply in Q1. The company anticipates its monthly active users to lie in the range of 365 million to 367 million in the first quarter versus FactSet’s consensus forecast that is capped at a much lower 353 million.  

Pinterest is expected to release its Q1 earnings report on 5th May.

The company also expressed confidence in its financial stature and said that at the end of the first quarter, it had £1.38 billion worth of cash reserves, marketable securities, and other cash equivalents. The company also cited its revolving credit facility worth £406 million and said that it didn’t have any financial debt at the end of Q1.

Pinterest Withdraws Its Full-Year Guidance

Pinterest also accentuated on Tuesday that the ongoing health crisis is weighing heavily on its global advertising revenue as it withdrew the full-year guidance for fiscal 2020. In its press release, Pinterest said:

“In light of the rapidly evolving and unpredictable effects of COVID-19, Pinterest is currently not in a position to forecast the expected impact of COVID-19 on its financial and operating results for the remainder of 2020. As the COVID-19 pandemic has continued to unfold, it has impacted Pinterest’s advertising revenue globally.”

At £13.86 per share, the £7 billion company is currently around 5% down year to date in the stock market.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.

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