The share of Pinterest (WKN: A2PGMG) has apparently presented brilliant quarterly figures as part of the reporting season. The share certificates were able to increase significantly in double digits after this figure. Most recently, the stock closed trading at a 36% gain at the end of the week. This in turn shows that the numbers have convinced. Or the investors expected something worse.
But were the numbers really that great? Hm. Let’s put it this way: there were definitely some highlights. A large part of the enthusiasm, however, can be attributed to an overall weaker expectation. Let’s take a look below at what investors should know.
numbers, data, facts
As we can see with regard to sales development, for example, this metric only rose 4% year over year to $ 272 million. With this value, Pinterest met the exact result of the previous quarter. Say, once again presented revenue of $ 272 million. At any rate, we cannot speak of strong growth here. With earnings before interest, taxes, depreciation and amortization of $ -33.9 million, Pinterest remained in the red. So far not bad. But not a positive surprise either.
A highlight was the development of the pinner. Pinterest now has 416 million active users, which corresponds to an increase of 39% compared to the previous year. In the last quarter there were also 367 million pinners. This shows that the platform itself has developed splendidly. And that should also be the reason why some investors are now freaked out.
However, the monetization of the platform is and remains a problem: The average revenue per user has dropped globally by 21% year-on-year to $ 0.70. US users had average sales of $ 2.50, compared to $ 2.80 a year earlier. Other international users, on the other hand, had an average revenue of $ 0.14, compared to $ 0.11 a year earlier. After all, that shows at least minor improvements in the monetization of this large circle.
What needs to be considered now
Basically: Yes, Pinterest is consistently expanding its platform. First of all, winning new users has a high priority and, no question: the social network is consequently becoming more attractive. It was foreseeable that advertising budgets may now be cut. This can also explain a slump in the figures. Although Pinterest was still able to achieve moderate sales growth of 4%. So far for the highlights.
However, the mission behind the share remains: to monetize international users. The $ 0.14 is not the target for management. It’s just a start. Especially with a view to the average values of the Americans.
Another positive aspect is that the potential of this group of users is growing. Pinterest now has 321 million international users and if the average turnover can be consistently increased here, the turnover should multiply in the long term. The broad market should therefore have initially priced in such potential with its price increase. However, it is still important to deliver here.
Watch exactly that!
As a network, Pinterest may now have reached a critical mass that will attract more and more users. It may be advisable to follow the development of user growth in general. However, the tip of the scales is monetization. Especially the international circle.
Foolish investors who do not simply want to celebrate the figures blindly should pay close attention to this. In the medium to long term, the fate of the share should be decided based on average international sales. After all, this group of users now amounts to 77.1% of all Pinterest pinners.
The post Pinterest share: investors celebrate the 2nd quarter, here are the few highlights appeared first on The Motley Fool Germany.
Vincent owns shares of Pinterest. The Motley Fool owns shares of and recommends Pinterest.
Motley Fool Deutschland 2020