Pinterest stock drops after missing revenue expectations.

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Pinterest Inc. stock experienced a rollercoaster ride in after-hours trading, initially dropping by 23% before recovering, following a revenue miss and unremarkable guidance. The company reported a fiscal fourth-quarter net income of $201.2 million, with adjusted earnings of 53 cents a share. Despite a 12% increase in revenue to $981.3 million, the figures fell short of analysts’ expectations of 52 cents a share on revenue of $991 million. Pinterest’s CEO also announced that the company is working on developing an AI-based automated advertising system. The company projects first-quarter revenue to be between $690 million and $705 million, aligning closely with analyst expectations of $702 million.

The release of Pinterest’s Q4 results comes as ad spending continues to play a significant role in the earnings reports of tech giants like Facebook’s Meta Platforms Inc., Google, and Snap Inc. Analysts are labeling Pinterest’s Q4 numbers as solid but unspectacular, especially following Meta’s recent blowout earnings. Despite the mixed reaction from investors, Pinterest’s stock has surged by 64% in the past year, significantly outperforming the broader S&P 500 index, which has increased by 22%. The announcement also coincided with a statement from Pinterest CEO Bill Ready, who highlighted the company’s transformative year and the rise in global monthly active users to an all-time high of 498 million.

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