But the second quarter of 2022 should be the worst of Pinterest's growth deceleration, as most countries began to lift lockdown or ease restrictions in a meaningful way in the second and third quarters of last year. The Wall Street analysts anticipate that PINS' sales growth will continue to slow from +20.0% in Q4 2021 to +18.7% in Q1 2022 and +14.6% in Q2 2022 as per S&P Capital IQ data. This is because Pinterest should witness an acceleration of its revenue growth again in the second half of 2022, given a more favorable base for comparison. In my opinion, I think Pinterest's stock price might see a small rebound or go up slightly in the next one year. As such, Pinterest's recent share price correction is justified.
In PINS' FY 2021 10-K filing, the company mentioned that people visit the Pinterest platform to "get inspiration" for things like "cooking dinner", "remodeling a house" and "gardening." It is natural that PINS' monthly active user growth slows as the economy reopens and an increasing number of people step out of their homes more often. Pinterest's Q3 2021 and Q4 2021 revenue and monthly active user metrics appeared to confirm investors' fears that the company's strong growth in late-2020 and early-2021 will not be sustainable when Work-From-Home or WFH tailwinds ease. Pinterest's Monthly Active Users For The Last Five Quarters
Similarly, Pinterest's monthly active user growth slowed from +9% YoY in Q2 2021 to +1% YoY in Q3 2021, and the company even saw a -6% YoY decline in monthly active users for the most recent quarter. PINS' YoY top line expansion moderated from +125% in the second quarter of 2021 to +43% and +20% for Q3 2021 and Q4 2021, respectively. Pinterest has witnessed a substantial slowdown in its revenue growth and monthly active user growth in the second half of last year. PINS' severe share price correction in the past couple of months is no surprise, if one looks at the company's revenue and monthly active users trend highlighted in its Q4 2021 earnings presentation slides. Pinterest's Share Price Performance Since Late-October 2021 Between Octoand the time of writing this article, PINS' stock price fell by -58.7%, while the S&P 500 declined marginally by -1.0% during the same period. In its FY 2021 10-K filing, Pinterest describes itself as an operator of a platform where "people discover inspiring and personalized visual content" referred to as "Pins." Pinterest's shares have been dropping significantly since late-October 2021. PINS' valuations have de-rated because of slower revenue growth expectations, and this seems quite fair which justifies my Hold rating. A potential rebound to $50 or where the stock was trading three months ago would make the stock a very attractive investment proposition, but I don't think this is very likely. I have a Hold investment rating for Pinterest, Inc.'s ( NYSE: PINS) shares. Pinterest's historical ratings below, therefore, can serve as a valuable tool for investors.5./15 WEST/iStock Unreleased via Getty Images Elevator Pitch That suggests that analyst recommendations are the outcome of an objective and thorough examination of Pinterest's financials, market performance, and future outlook by experienced professionals. Ratings generally communicate what analysts sense about Pinterest stock, and they use a lot of effort and time to analyze it and arrive at a rating. Pinterest Analyst RatingsPinterest's analyst stock recommendations are determined by taking an average estimate of all analysts we track and classifying them as Strong Buy, Buy, Hold, Strong Sell, or Sell.
Note that most analysts generally publish their price targets in research reports on specific companies, along with recommendations for the company's stock.Although price targets are often quoted in the financial news media, there could be a delay between the publication of the latest analyst outlook on Pinterest and the information provided on this page.
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