Image-sharing platform Pinterest (NYSE:PINS) is scheduled to announce its first-quarter earnings after the stock market closes on April 27. Social media stocks have been under pressure as advertisers pared back their spending due to macro pressures and fears of an impending recession. Analysts expect Pinterest’s profitability to decline in Q1 2023 due to subdued revenue and weak margins.
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Q1 Expectations
In February, Pinterest reported lower-than-expected Q4 2022 revenue and issued disappointing top-line guidance for the first quarter. The company’s Q4 adjusted EPS declined 41% to $0.29 but managed to surpass analysts’ consensus estimate. Global monthly active users (MAU) increased 4% to 450 million in Q4 2022.
Pinterest guided for Q1 revenue growth in the low single digits. Meanwhile, analysts expect the company’s revenue to rise 3.4% year-over-year to $594.2 million. They project nearly break-even adjusted earnings compared to adjusted EPS of $0.10 in the prior-year quarter.
Monness analyst Brian White expects Pinterest to meet his revenue and EPS forecast of $605.1 million and $0.04, respectively. White noted that his revenue growth estimate of 5% indicates a slight acceleration compared to Q4 2022, following six straight quarters of deceleration. The analyst expects 4% MAU growth in Q1 2023.
“After experiencing a harrowing fall, Pinterest remains in recovery mode,” said White. The top-rated analyst currently projects the company’s Q2 2023 revenue to grow by 9% and full-year revenue to rise 12%. White has a Hold rating on Pinterest.
TipRanks’ Website Traffic Tool indicates that visits on pinterest.com increased 5.2% year-over-year in Q1 2023 and were up 7.6% on a sequential basis. Higher traffic bodes well for the company’s top-line growth.
What is the Target Price for PINS Stock?
Wall Street’s Moderate Buy consensus rating for Pinterest stock is based on seven Buys and 14 Holds. The average price target of $28.95 suggests 4.4% upside. Shares have risen over 14% since the start of this year.
Conclusion
Macro challenges are expected to continue to impact social media companies. Nonetheless, the performance of larger rival Meta Platforms (NASDAQ:META) and Pinterest’s guidance could influence PINS and other social media stocks over the near term.
