Pinterest, Inc. (PINS) Is a Trending Stock: Facts to Know Before Betting on It

Pinterest (PINS) stock has seen a recent surge, outperforming the S&P 500 and its industry, with analysts revising earnings estimates upward for the current and next fiscal years, projecting growth of 39.5% and 17.7% respectively. Revenue forecasts also indicate positive growth, with a 14% increase expected for the current quarter and similar growth rates for the fiscal years 2024 and 2025; however, the stock currently holds a Zacks Rank #3 (Hold) and a Value Style Score of D, suggesting it may perform in line with the market and is trading at a premium compared to its peers.

Analysis

Pinterest (PINS) has demonstrated significant stock price appreciation over the past month, returning +19.8% and outperforming both the S&P 500 composite's +7.4% gain and its Zacks Internet - Software industry's +14.8% increase. This positive momentum is supported by upward revisions in earnings estimates. For the current fiscal year, the consensus earnings estimate stands at $1.80 per share, reflecting a +39.5% year-over-year growth and a +4.3% increase in the estimate over the last 30 days. Similarly, the next fiscal year's consensus earnings estimate is $2.12, indicating a +17.7% projected growth, with this estimate having risen by +2.3% in the past month. Revenue projections are also robust, with an expected +14% year-over-year increase for the current quarter to $973.27 million, and full-year revenue growth anticipated at +13.9% for the current fiscal year and +14.1% for the next. However, in its last reported quarter, while Pinterest's revenue of $854.99 million (+15.5% YoY) surpassed consensus by +1.09%, its EPS of $0.23 missed estimates by -8%, despite being higher than the $0.20 reported a year ago. Over the last four quarters, the company has consistently beaten revenue estimates but has only surpassed EPS estimates twice. The stock currently holds a Zacks Rank #3 (Hold), suggesting it may perform in line with the broader market in the near term, and its Zacks Value Style Score of D indicates it is trading at a premium relative to its peers.

Key Decisions for Investors

• Investors should acknowledge Pinterest's strong recent stock performance and positive earnings and revenue growth outlook, but remain cognizant of its current premium valuation as indicated by a Zacks Value Style Score of D.
• Given the Zacks Rank #3 (Hold), existing shareholders might consider maintaining their positions, while new investors could await a more attractive entry point or further confirmation of sustained earnings delivery.
• Monitor upcoming earnings reports closely, particularly for EPS performance against consensus, as the last quarter saw an EPS miss despite consistent revenue beats.