Well, well, well. Looks like Pinterest just tripped over its own shoelaces and fell face-first into the “WTF earnings report” pile. Despite beating Wall Street’s expectations on both the top and bottom lines for Q3, the company’s stock decided to take a 14% plunge in extended trading. Why? Atrocious guidance, friends - atrocious guidance for the friggin ‘upcoming holiday quarter that makes or breaks pretty much every retailer on the planet. 

(Source: Giphy) 

First off, the good news (because it doesn’t last long): Pinterest came in hot with $898 million in revenue for Q3, just edging out the $896 million analysts had on their bingo cards. Earnings per share? A cool 40 cents, beating expectations of 34 cents. Naturally, everything was so far so good for Pinterest, but then havoc followed. 

(Source: Fast & Company) 

In short, Pinterest’s Q4 revenue forecast came in between $1.125 billion and $1.145 billion. For those of you keeping score, that’s a midpoint of $1.135 billion—which is basically a rounding error away from the $1.143 billion Wall Street was hoping for. But in the land of overreacting investors, that kind of rounding error might as well be a fiscal apocalypse. Because, you know, math.

(Source: IBD) 

Pinterest’s CFO, Julia Donnelly, didn’t even bother with the sugarcoating. She straight-up admitted that the company’s facing some gnarly headwinds, especially from the consumer packaged goods (CPG) market—shout out to your favorite food and beverage companies for tightening their ad budgets just in time to ruin everyone’s holiday cheer. Apparently, the CPG sector decided to ghost Pinterest, and that’s not going to magically change by Q4.

On the other hand, despite the ad slowdown and the -14% fallout, Pinterest is still growing. Sales were up 18% year-over-year, and Pinterest is sitting on 537 million global monthly active users (MAUs), which beat analyst expectations. That’s an 11% jump from last year, which is honestly pretty impressive for a platform that’s still awkwardly trying to hang with the cool kids like Meta and Snap.

(Source: Giphy) 

The one thing Pinterest is doing right though is pushing into shoppable content. Remember that partnership with Amazon? Yeah, it’s finally starting to pay off. Now Pinterest users can shop directly from the e-commerce giant for beauty products, home decor, and whatever other random crap Gen Z buys at 3 AM when they’re 100 TikToks deep and feeling impulsive.

(Source: Digital Commerce 360) 

Additionally, like every tech company desperate to stay relevant, Pinterest has been dumping cash into artificial intelligence to better target ads and recommend content. Sure, it’s improving user experience and getting advertisers juiced up, but it’s also cranking up expenses. Total costs for the quarter hit a whopping $904 million, up 17% from last year. Ooof. 

(Source: Barrons) 

What’s more is that given the impressive numbers (outside the guidance), Pinterest’s board authorized a $2 billion share buyback. Will it work? Eh, hard to say. It’s kind of like giving my wife a really nice bouquet after I said something wrong at dinner—it’s a nice gesture, but it doesn’t erase the fact that I’m still an idiot, amirite? 

(Source: Giphy) 

In the end though, it’s obvious that Pinterest’s Q3 wasn’t a total dumpster fire, but that soft Q4 guidance left a bad taste in investors’ mouths. The company is growing, investing in AI, and expanding its user base, but the ad market is still pretty nasty in volatility. 

But again, Pinterest is still looking solid despite being down -19.66% YTD. Soooo, is this a “BTFD” opportunity in the making considering the solid financials? Maybe. But with the holiday season looming like a judgmental aunt at Thanksgiving dinner, Pinterest better hope it's shoppable content and AI investments can pull off a miracle. Otherwise, it might just end up as the subject of its own ironic Pinterest fail—a platform full of beautifully curated projects, with none of the execution to back it up.

In the meantime, place your bets accordingly friends and as always stay safe and stay frosty! Until next time…

P.S. Pinterest crashed -14%, but so what? Especially since our last Wild Friday Alert popped off with a 116% jump in minutes—and we’ve been hitting at least one 100%+ winner every single week on average since we started.The best part? We just dropped a brand new alert that’s set to explode right here. 

Stocks.News holds positions in Meta Platforms, Amazon, and Snap as mentioned in the article.