Pinterest soars 34% on strong earnings beat and spike in users amid Covid-19 pandemic
- Pinterest soared 34% on Thursday after it reported better-than-expected third quarter earnings that topped revenue and income estimates.
- The social media company experienced a surge in monthly active users as more people discovered the image-sharing service amid the Covid-19 pandemic.
- Pinterest expects its growth to accelerate further in the fourth quarter, with the potential for revenue to grow 60% year-over-year, according to the company.
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Helping boost its earnings results was a surge in monthly active users, especially overseas. Pinterest reported international revenue growth of 145%, and US revenue growth of 49%.
Pinterest said the surge in growth could be attributed to the Covid-19 pandemic.
"MAU growth was strong in both the US and international markets, driven primarily by Covid lockdowns in many regions," Pinterest said in its third quarter investor letter.
Here are the key numbers:
Revenue: $442.6 million, versus the $386.3 million estimate
Adjusted EPS: 13 cents, versus the 3 cents estimate
Global Monthly Active Users: 442 million, versus the 437 million estimate
Pinterest said its strong growth rate will continue into the fourth quarter and even accelerate. The social media company expects revenue growth of 60% in the fourth quarter.
The growth has been driven by investments in advertising technology and sales coverage, macro tailwinds, and accelerated advertising counts driven by the safe nature of the Pinterest brand, according to Goldman Sachs.
Goldman sees Pinterest's long-term monetization opportunity driving shares higher, and accordingly raised its price target on the firm to $86 from $61, representing potential upside of 75% from Wednesday's close.
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