On Friday, shares of Pinterest Inc. have fallen by 17%, as the scrapbook’s disappointing annual forecasts shocked investors’ confidence in its ability to speed up profit.
The fall in shares after the first quarterly results of Pinterest as a public company took some of the shine from the successful stock market debut last month. Until Thursday, Pinterest’s shares rose 62% since the April 18 opening.
The company, which receives revenue through ads placed among the “stacks” or postings that users charge locally, predict full year revenue from $ 1.055 billion to $ 1.08 billion – mostly in line with analysts’ estimates.
JPMorgan analysts in a statement said: “We continue to believe that the international and self-offered early stage Pinterest bidders provide meaningful growth drivers over time, but they require strong and lasting executions and Pinterest can not roll at one and the same time, “JPMorgan analysts said in a statement.
Two mediation groups said it would take the company for at least two years to become profitable.
Rosenblatt Securities Analyst Mark Zgutowicz said, “We see low daily engagement compared to colleagues who will limit average earnings to the potential of the user.”
Most of the brokers are optimistic in the stock, with four of them estimating “buy” the stock or higher and only one recommending “sell”. Twelve brokers have a “hold” rating.
In the first quarter, Pinterest’s net loss narrowed to $ 41.4 million in the quarter ended March 31, from $ 52.7 million a year earlier.
Morningstar analyst Ali Mogharabi said he expected the company to be profitable by 2021 and that the results of the first quarter showed Pinterest’s profit in profit.
Credit Suisse analyst Stephen Ju said: “While about 93% of total revenue was from the US, we believe that growth opportunities remain in the market, as Pinterest can profit more from its users in the United States through increased cargo ads (which resemble native ads), and adding more advertisers. ”
Shares dropped 13.7 percent to $ 26.62 in trading in the morning after falling 16.7 percent earlier./Investing.com