The Pinterest share closes because of the person drop by greater than 18%
Pinterest stock closed 18.24% on Friday after the company’s second-quarter earnings saw a drop in monthly active users on Thursday.
Pinterest had 454 million monthly active users, more than 5% less than the 478 million the company reported in April. Wall Street expects the company to grow its monthly user base to 482 million monthly active users, according to a forecast from StreetAccount.
Pinterest’s worst trading day to date was March 16, 2020, when shares closed 18.7% due to the Covid bans. The company went public in April 2019.
In a letter to shareholders, the company attributed the decline in engagement to a “disproportionate” growth spurt as users spent more time at home during the Covid-19 bans.
JPMorgan downgraded Pinterest to neutral on Friday, citing concerns over the monthly loss of active users and a disappointing third quarter outlook.
Wells Fargo analysts in a statement to investors on Friday expressed their confidence in the company’s ability to “execute its monetization strategy,” but lowered their price target to $ 85 in response to membership decline.
“While MAU engagement trends from pandemic-induced levels are returning to reality, we believe PINS stock to be attractive given the continued ARPU expansion driven by advertiser demand and the easing of COVID restrictions,” Wells Fargo analysts wrote.
Evercore ISI downgraded Pinterest from Outperform to Inline and lowered its price target from $ 98 to $ 60 in response to the drop in users.
“This is likely a temporary negative turn in PINS ‘lead metric, but it’s a negative turn and the company appears to have lost many of the new users it gained during the COVID crisis,” Evercore told ISI -Analysts in a notice to investors Friday. “It is now an open question whether PINS has a maturity risk in its lead market, the US.”
Despite the monthly decline in active users, Pinterest reported quarterly revenue of $ 613 million.