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Pinterest (PINS) Stock Sinks As Market Gains: Here's Why

In the latest market close, Pinterest (PINS) reached $29.12, with a -0.99% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.45%. Meanwhile, the Dow lost 0.23%, and the Nasdaq, a tech-heavy index, added 0.84%.

Shares of the digital pinboard and shopping tool company have appreciated by 1.38% over the course of the past month, outperforming the Computer and Technology sector's loss of 0.98% and lagging the S&P 500's gain of 2.54%.

The investment community will be paying close attention to the earnings performance of Pinterest in its upcoming release. The company's earnings per share (EPS) are projected to be $0.34, reflecting a 21.43% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $896.71 million, up 17.49% from the prior-year quarter.

PINS's full-year Zacks Consensus Estimates are calling for earnings of $1.43 per share and revenue of $3.64 billion. These results would represent year-over-year changes of +31.19% and +19.12%, respectively.

Investors might also notice recent changes to analyst estimates for Pinterest. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.28% lower within the past month. As of now, Pinterest holds a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Pinterest has a Forward P/E ratio of 20.51 right now. For comparison, its industry has an average Forward P/E of 30.61, which means Pinterest is trading at a discount to the group.

It is also worth noting that PINS currently has a PEG ratio of 0.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Internet - Software industry stood at 2.03 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Pinterest, Inc. (PINS) : Free Stock Analysis Report

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Zacks Investment Research