Pinterest stocks took a hit after the company shared their third-quarter sales on Thursday. The revenue results were well under their expected sales for the period.
The third-quarter adjusted earnings were at a 4-cent loss analyst, but the new adjusted earnings were shown at a 1-cent loss analysis. Total revenue reported is $279.7 million. The analyst estimate was $281.3. Making for a few million dollar deficit to scare off shareholders.
Pinterest CEO Simberman made the company’s goals clear in a press conference. The numbers for a healthy corporation are not out-of-reach, but they do need help from larger platforms.
“If PINS stock can maintain above the 50% retracement and $26.90. If it can, we may see it recapture $28 and ultimately push through downtrend resistance. To do so, though, Pinterest will likely need the broader market’s support.” Silberman stated.
Pinterest has connections to all social media platforms, where things are shared and linked between the two. Pinterest is steadily working to strengthen these relationships, and, in turn, naturally attract consumer bases.
Pinterest changed its revenue guidance range for the year to $1.115 billion from their previous $1.1 billion. This change excited investors, but the user revenue is still not rising to meet expectations. August showed promising for the stock, influencing these numbers, but since the end of August the stock is nearing a 30% loss.
In the previous quarter, Pinterest sported higher-than-expected revenue and the valuation led to high-hopes for this quarter’s release. The small dip down t0 $20.45 seemed more monumental because of this. Investors surely suffered a few loses.
Monthly average users increased by 30% on Pinterest since last year. The 300 million reported users are spread across the world, with 13% growth in the U.S. and 38% growth in other countries. Now, the U.S stays steady at 85 million users, with the international user base still expanding.
Revenue per user also increased by 41% in the U.S. and 123% in other countries in the past year, so it is doing much better in growth outside of the States. A boom like this is usually monumental, but much of the spending power through the app is done in the U.S. thus far. Internationally, revenue per user was 8 cents, with the U.S having a $2.25 per user revenue rate.
Changes To The Platform
The third quarter of last year Pinterest began a redesign. Their platform’s goals was to connect to more business and improve customer recommendations. The DIY scheme of the application is hard to enact purchasing. This is one of the problems being tackled by Pinterest innovators. While Pinterest attempts to convert user content into revenue like many of the best influencer marketing platforms, it needs to attract businesses to its advertising platform and prove return on investment.
Ben Silbermann, Pinterest CEO, announced plans on creating easier interaction between customers browsing and shops selling on the platform. Ad spending will come into play, so Pinterest can begin profiting more, with more shopping occurring directly connected to searches on the platform.
“We also continued to grow and diversify our advertiser base and improve advertisers’ ability to measure the effectiveness of their ad spend. This is part of our larger and ongoing effort to create value for businesses on Pinterest.” Said the announcement from Silbermann.
The quarter had 322 million active users. This number is up 28% from this point last year. To break it down in terms of revenue: each user equates to a 90 cent revenue increase. Even with Pinterest’s third quarter plummet, the overall year is looking up from 2018’s numbers.