NYSE:PINS) shareholders should be happy to see the share price up 28% in the last quarter. But that doesn’t change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 25% in one year, under-performing the market.” data-reactid=”28″>Pinterest, Inc. (NYSE:PINS) shareholders should be happy to see the share price up 28% in the last quarter. But that doesn’t change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 25% in one year, under-performing the market.
Pinterest wasn’t profitable in the last twelve months, it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, Pinterest increased its revenue by 47%. That’s a strong result which is better than most other loss making companies. The share price drop of 25% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our brains have evolved to think in linear fashion, so there’s value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
report showing consensus forecasts” data-reactid=”49″>Pinterest is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
We’ve identified 4 warning signs with Pinterest , and understanding them should be part of your investment process.” data-reactid=”51″>While Pinterest shareholders are down 25% for the year, the market itself is up 14%. While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. It’s great to see a nice little 28% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it’s the start of a new trend. It’s always interesting to track share price performance over the longer term. But to understand Pinterest better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 4 warning signs with Pinterest , and understanding them should be part of your investment process.
list of growing companies with considerable, recent, insider buying.” data-reactid=”52″>We will like Pinterest better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Get in touch with us directly. Alternatively, email email@example.com.” data-reactid=”54″>This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.