[ad_1] The post Pinterest Stock Gets Crushed on Disappointing User Metrics appeared first on Millennial Money. Despite soaring revenue, Pinterest (NYSE: PINS) stock got crushed on Friday after releasing second quarter earnings showing a sequential dip in monthly active users (MAUs). The company’s cautious commentary regarding engagement also rattled investors as people are starting to spend more time outside of home. As of 11:15 a.m. EDT, Pinterest shares were down by 19%. The pandemic-induced engagement surge is cooling off Revenue in the second quarter jumped 125% to $613.2 million, crushing the consensus estimate of $562.1 million. Global MAUs climbed 9% to 454 million, but that growth rate represents significant deceleration from the 30% MAU growth Pinterest enjoyed in the first quarter. Additionally, MAUs were down on a sequential basis compared to the 478 million MAUs Pinterest had in the first quarter. Critically, Pinterest lost 7 million MAUs where monetization is highest. The company attributed the decline to easing lockdown restrictions in the United States. “Given that many of Pinterest’s core use cases (e.g., decor, garden, cooking, DIY) are especially relevant at home, we believe we disproportionately benefited from increased time spent at home during pandemic lockdowns,” Pinterest wrote in its letter to shareholders. “Since mid-March, however, we believe engagement on Pinterest was disproportionately lower as people began spending more time socializing with friends outside their homes, eating in restaurants, and generally participating in activities that are not our core use cases.” On the bright side, Pinterest continues to make progress in strengthening overall monetization, which is critical to the bullish thesis. Average revenue per user (ARPU) increased meaningfully on all fronts. Segment ARPU YOY Growth U.S. $5.08 103% International $0.36 163% Global $1.32 89% Data source: Pinterest. Pinterest is seeing some momentum in building out e-commerce capabilities on the platform, and the partnership with Shopify (NYSE: SHOP) is helping drive that initiative. The company also recently launched Automatic Bidding for Awareness in order to streamline the bidding process for advertisers. That all resulted in adjusted net income of $169.9 million, or $0.25 per share. Wall Street analysts were expecting just $0.13 per share in adjusted profits. A gloomy outlook in the near term Pinterest expects its engagement headwinds will persist going forward, although much uncertainty remains. Due to the lack of visibility, the company declined to provide MAU guidance. Revenue growth is also expected to decelerate, with third quarter sales forecast to grow in the “low-40% range.” Combine that top line outlook with higher operating expenses—Pinterest continues to invest in long-term growth strategies—and Pinterest’s profitability is likely to get pinched. “To build a new ecosystem for creators, we have to invest, and that means giving distribution to Idea Pins at the expense of some high-value advertising inventory, which impacts revenue,” CFO Todd Morgenfeld commented on the conference call with analysts. Pick Like A Pro Where to invest $500 right now Before you buy Amazon, or Netflix, or Apple, consider this… The team at Motley Fool first recommended each of those stocks more than a dozen years ago! They discovered Netflix for $1.85 per share, back in the days of DVDs by mail. And recommended Amazon at $15.31 in 2002, before most people were comfortable using credit cards online. And even hit Apple at $4.97 per share, about a month before the release of the very first iPhone. Check out where those stocks are today. The bottom line: a $500 investment in all three of these stocks would be worth more than $200,000 today! And here’s why that’s important: The Motley Fool’s flagship investing service Stock Advisor just announced their top 10 “best buys now” across the entire stock market. Whether you’re starting with $100, $500, or more, you’ll want to get the full details! Click here to learn more The post Pinterest Stock Gets Crushed on Disappointing User Metrics appeared first on Millennial Money. [ad_2] Source link
