Should Investors Buy the Dip on Pinterest?
Visual search engine Pinterest (NYSE: PINS) reported its 2021 second-quarter earnings on July 29, and has seen its stock fall more than 25% since then. This large drop may have investors spooked, but is the selling warranted, or is there an opportunity? Here is why Pinterest's dip may only be a temporary setback for investors.
Pinterest turned in a strong earnings headline, Q2 revenue was $613 million, and earnings per share were $0.25, both beating analyst estimates. Unfortunately, Pinterest's monthly active user data is what scared investors. While the company's global MAU grew 9% year over year to 454 million, Pinterest lost 24 million users from the prior quarter, and U.S. users were down 5% from the second quarter of 2020.
A social media platform's number one rule is "Don't lose users," and Pinterest has broken that rule. Management attributed the loss of engagement to the end of lockdowns and tough comparables due to COVID-19 while noting that the lost users were primarily desktop users and that international mobile app users grew 20% year over year.
Source Fool.com
