Pinterest saw shares plunge in after-hours trading after revenue fell shy of Wall Street estimates and gave a weak outlook for the current quarter.

Closing Bell

Pinterest Tanks After Revenue Miss, Weak Outlook

Welcome back to closing bell and cheddar news. Everyone, you're taking a live look at Pinterest shares in the after hours tanking nearly double digits. So let's get to our own cheddar news is Michele Castelli oh, with the results? Michelle. Yeah. At one point Kristen I saw shares down 12% on Pinterest and what we're seeing is while they did beat on earnings per share coming in at 29 cents versus the 27 cents estimate. There was a huge missile revenue. They actually came in at 807 7.2 million. The street was expecting 886.3 million. This is a tale that has been told across a lot of digital advertising, reliant technology stocks across the board. Even companies like meta which did beat on earnings estimates, sorry, which beat on revenue estimates were still down overall in terms of revenue, 4% year over year. Um, I think alphabet was also down about 3.6%. So what we are seeing is really a slow go down in the digital advertising market. And as I said earlier, smaller companies like Pinterest like snap are the ones that are seeing the brunt of this cut in marketing budgets now going forward, they also issued pretty weak guidance. They did say that the first quarter of 2023 they're only expecting single digit revenue growth. So again, not great news for the next for the first quarter of this year. As you mentioned earlier that there was a round of layoffs as their restructuring as well. And this is also another thing we're seeing across the tech industry. So a pretty rough quarter for them, but also a tale being told across a lot of different companies. Right. How does Pinterest though? Michelle differ from some of the other social media companies out there? I mean we know it's not as big as the other ones, but is there enough of a moat around this company to survive some of these challenging times? You know, there are two things that I've always been bullish on, Pinterest on and one is that they tend to have what advertisers call a brain and safe environment. What you're seeing is you won't see as many of those toxic comments. A lot of those questionable store stories or questionable fact check things that need to be fact checked. In fact, Pinterest is one of the first platforms to ban things like anti vaccination efforts because it's just not really a place where people go to for that. In that case it makes brands a little bit more um, safe, a little bit more willing to invest money, especially when it comes to products that they don't want to put against controversial content. The second thing about Pinterest that makes them really good is they have a great search algorithm rhythm and they're really based on shopping. So if you're looking for a company that can prove return on investment in terms of getting people to spend things they've always been great on that visual search, They have been expanding recently. Um I know they added some partnerships with some music groups, including Warnermedia this past quarter. We're also seeing that there's investment from other companies like Ellie Management, which could take a big share in the company last quarter. But again, they are still facing that same overall problem that everyone is facing, that just people aren't investing as much in marketing at this time and they're going to be hit hard. I was just taking a look at the average revenue per user numbers. It comes in at a dollar, a dollar 90 and change. That's a lot lower than what you're seeing at companies like meta. Alright, Michelle Castillo leo with the breakdown for Pinterest the stocks sliding in the after hours. Still. Michelle, thank you.