Pinterest Stock Is Tumbling After Earnings. Here’s Why Wall Street Is Concerned.

According to a Barron’s count, astatine slightest fractional of the 28 analysts covering Pinterest slashed people prices, and respective downgraded Pinterest stock. The mean people terms is present $59.46. Before net it was astir $80.

Late Thursday, Pinterest said that its monthly progressive user, oregon MAU, number fell by 5% oregon astir 20 cardinal users successful the 2nd quarter, compared with the first. It further disclosed declines successful U.S. MAUs, done July up until Tuesday, reporting a 7% drop, though globally its idiosyncratic number grew 5%.

To his recognition CEO Ben Silbermann straight addressed the contented connected the league telephone Thursday. The brag told investors the institution had seen a large boost to its idiosyncratic basal arsenic radical were stuck inside. Now that pandemic restrictions are easing successful immoderate parts of the world, that inclination has reversed to immoderate extent.

“Now, arsenic the satellite opens up, we’re seeing the akin effect successful the other direction,” helium said.

Evercore ISI expert Mark Mahaney downgraded shares to an In Line standing from Outperform, cutting his people terms to $60 from $98.

In the probe note, Mahaney contrasted Pinterest’s reopening show with Twitter (TWTR). As the lockdown orders took effect past year, Pinterest made the largest comparative boost to users among the ample social-media companies, and Twitter received the second-biggest summation successful users.

But, Pinterest shed 7 cardinal users successful the U.S. from the archetypal quarter, compared with Twitter’s nonaccomplishment of 1 cardinal U.S. users. Twitter besides grew U.S. idiosyncratic number 11% compared with the year-ago quarter, Mahaney wrote.

Mahaney noted that changes to Google Search had a antagonistic interaction connected Pinterest’s idiosyncratic trends, and said the institution pointed retired that its more-lucrative mobile users grew modestly successful the U.S. and globally by 20% compared with a twelvemonth ago. Mobile users are a “significant majority” of Pinterest’s revenue, Mahaney said.

J.P. Morgan expert Doug Anmuth, too, trimmed his people price, and downgraded shares to Neutral from Overweight. Anmuth’s caller people of $68—previously $95—reflects a aggregate of 10.5 times his estimated 2023 gross of $4.3 billion. Anmuth said successful the enactment that second-quarter’s results has triggered interest astir the aboriginal MAU maturation aft the company’s pandemic-related gains.

Anmuth is besides acrophobic with the company’s plans to displacement Pinterest’s main merchandise from its existing “browse and prevention ideas” model, to a destination for its users to link with creators. “Idea Pins” operates crossed 22 markets arsenic of the 2nd quarter, and has received immoderate affirmative aboriginal traction, Anmuth wrote.

But his squad is acrophobic that successful the adjacent term, the institution could endure hiccups arsenic users power to watching richer streaming and video content. The caller types of media mightiness not enactment crossed each its categories, Anmuth wrote.

Pinterest banal has had a pugnacious twelvemonth truthful far, falling 11%, arsenic the S&P 500 index precocious 18%.

Write to Max A. Cherney astatine max.cherney@barrons.com