Visual social media lifestyle brand platform
Pinterest NYSE: PINS stock has fallen over (-60%) off its pandemic highs of $90.09. To the disappointment of investors, the Company experienced a (-6%) drop in monthly active users (MAUs) despite having 431 million worldwide users in Q4 2021. While Pinterest was the darling of the
pandemic as global
lockdowns drove engagement in its platform, the
reopening trend has triggered a reversion in its growth despite the rise of the Omicron variant. The Company continues to lose momentum in its MAU but working on focusing on the most
relevant themes of the times. Management is focusing on quality over quantity as it seeks to improve the user experience in terms of engagement frequency,
ecommerce, and quality by investing its new tools for its platform. Prudent investors seeking exposure in a social media play can watch for opportunistic pullbacks in shares of Pinterest.
Q4 FY 2021 Earnings Release
On Feb. 3, 2022, Pinterest released its fiscal fourth-quarter 2021 results for the quarter ending December 2021. The Company reported an adjusted earnings-per-share (EPS) profit of $0.49 excluding non-recurring items versus consensus analyst estimates for a profit of $0.46, beating estimates by $0.03. Revenues rose 20% year-over-year (YOY) to $846.66 million beating analyst estimates for $827.73 million. Pinterest CEO Ben Silverman commented, “We took important steps in 2021 with the launch of our foundational technology to deliver a video-first publishing platform. And I’m proud to say that for the first time, we surpassed $2 billion in revenue for the year — growing 52% over the previous year — and reached our first full year of GAAP profitability. As we look ahead to 2022, we plan to further invest in our business as we scale the distribution of Idea Pins through our creator-led content efforts and enhance our core Pinner experience and shopping to make Pinterest the destination for inspiration and action on the internet.”
Guidance
The Company expects fiscal Q1 2022 revenues to grow in the high teens YoY. Non-GAAP operating expenses are expected to grow 10% quarter-over-quarter (QoQ). Monthly active users (MAUs) were 86.6 million and global MAUs were 436.8 million as of Feb. 1, 2022.
Conference Call Takeaways
CEO Silberman underscored the positive and inspirational nature of Pinterest differentiating it from other social medial platforms mired in controversy. The Company has invested in building new publishing platforms for content creators with enriched new formats including short form video to create a more inspiration overall experience. Inspiration drives more planning and shopping which in turn drives advertising revenues and grows the value of Pinterest. The Company launched 150 new features and tools throughout 37 countries in 2021, directly resulting in a rise in session frequency. CEO Silberman commented on quality over quantity, “This supports our hypothesis that our investments in native content can be engagement accretive over time. We believe that with sustained investment will see these trends grow as more and more Pinners find and follow creators they love. We know we're building this new platform in a challenging environment. In Q4, we saw monthly active users decreased 6% year-over-year to 431 million. This was primarily due to the continued unwinding of the pandemic, lower traffic coming from search and increasing competition for user attention. We're clear eyed about these recent headwinds, and we believe that over the long term, our new publishing platform will deep engagement by Pinners.” The Company is specifically focused on improving the advertiser experience in addition to improving the core experience to cover the most relevant topics of the times. He concluded, “Our aspiration is to build an end-to-end platform that gives people great inspiration and the tools to buy, to make and to do those ideas for their lives. All in the space that's both positive and encouraging. We believe that the world needs this. And that's why we're increasing our investment to build it. And I'm confident that our team is up to the task.”
PINS Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the price action landscape for PINS stock. The weekly rifle chart peaked at the $44.68 Fibonacci (fib) level before collapsing to $22.51. The weekly rifle chart downtrend is starting to slow down as the 5-period moving average (MA) stalls at $25.85 and 15-period MA at $32.99. The weekly stochastic is attempting to cross up towards the 10-band. The weekly market structure low (MSL) buy triggered above $15.58. The weekly lower Bollinger Band (BBs) sits near the $13.20 fib. The daily rifle chart is attempting to breakout after channel tightening on a flat 5-period MA at $24.48 and 15-period MA at $25.44. The daily stochastic is trying to bounce through the 20-band. The daily upper BBs nearly overlap with the daily 50-period MA and fib at $30.51. Prudent investors can watch for opportunistic pullback levels at the $25.41 fib, $23.71 fib, $22.31, $20.50 fib, $18.19 fib, $15.93 fib, and the $13.20 fib level. Upside trajectories range from the $30.51 fib level up towards the $47.63 fib level.
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