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Will Top-line Expansion Augment Pinterest's (PINS) Q2 Earnings?
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Pinterest, Inc. (PINS - Free Report) is scheduled to report second-quarter 2023 results on Aug 1, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 29.43%, on average. Several initiatives aimed at supporting creators by improving comprehensiveness and shoppability on the platform, along with the introduction of new tools to boost advertisers’ capabilities to enhance reach and improve monetization, are expected to have resulted in higher revenues year over year.
Factors at Play
During the quarter, Pinterest revealed that it has selected Amazon as its first partner to introduce third-party ads on the platform. The partnership is a step forward in Pinterest’s broader goals of making each Pin a shoppable opportunity. The introduction of various brands on board will expand the advertiser’s capability to connect with users who have high commercial intent, thereby unlocking new avenues for growth and engagement. The collaboration will simplify the process for users to discover relevant products and ensure a best in class buying experience. Such initiatives are likely to have had a favorable impact on the company’s second-quarter earnings.
In the quarter under review, Pinterest introduced various features in the platform to support creators and improve monetization capabilities. The new upgrades enrich content makers with enhanced performance metrics and flexible aspect ratios and various new editing features. The features, which were previously available only to business account holders, are simplified into one simple format. The new features enable users to add links to all images, videos and TV livestreams. This link in all Pins features is aimed to open up new monetization opportunities by driving more traffic and increasing connections with brands.
The company introduced new advertising tools named Premiere Spotlight and Travel catalogs to support advertisers. Premiere Spotlight will allow advertisers to scale up and reach more customers by boosting the visibility for a desired time period. Travel catalogs will enable users to plan their vacations and allow them to book vacations directly from the brand websites. These initiatives are likely to have translated into higher revenues in the quarter.
In the second quarter, Pinterest announced a collaboration with Westbrook to produce innovative and engaging content across the Pinterest platform, primarily for the Halloween and the winter holiday season. It is the latest addition to the Pinterest exclusive suite of content partners that includes Conde Nast Entertainment, Dotdash Meredith and Tastemade. This is expected to boost the top-line performance in the second quarter.
Our estimate for average revenues per user (ARPU) from the United States and Canada is pegged at $6.04. Our estimate for Europe’s ARPU is pegged at $0.79. Per our estimate, monthly active users (MAUs) from the United States and Canada are expected at 95 million in the second quarter. MAUs from Europe are approximated to be 124 million. MAUs from the rest of the world are estimated at 233.7 million.
For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $698 million, suggesting an increase from the year-ago quarter’s reported figure of $666 million. The consensus estimate for adjusted earnings per share is pegged at 12 cents, up from 11 cents reported in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Pinterest this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -15.49%. The Most Accurate Estimate is pegged at 10 cents while the Zacks Consensus Estimate stands at 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +0.07% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Aug 3.
Toyota Motor Corporation (TM - Free Report) has an Earnings ESP of +12.64% and sports a Zacks Rank of 1. The company is set to report quarterly numbers on Aug 3.
Image: Bigstock
Will Top-line Expansion Augment Pinterest's (PINS) Q2 Earnings?
Pinterest, Inc. (PINS - Free Report) is scheduled to report second-quarter 2023 results on Aug 1, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 29.43%, on average. Several initiatives aimed at supporting creators by improving comprehensiveness and shoppability on the platform, along with the introduction of new tools to boost advertisers’ capabilities to enhance reach and improve monetization, are expected to have resulted in higher revenues year over year.
Factors at Play
During the quarter, Pinterest revealed that it has selected Amazon as its first partner to introduce third-party ads on the platform. The partnership is a step forward in Pinterest’s broader goals of making each Pin a shoppable opportunity. The introduction of various brands on board will expand the advertiser’s capability to connect with users who have high commercial intent, thereby unlocking new avenues for growth and engagement. The collaboration will simplify the process for users to discover relevant products and ensure a best in class buying experience. Such initiatives are likely to have had a favorable impact on the company’s second-quarter earnings.
In the quarter under review, Pinterest introduced various features in the platform to support creators and improve monetization capabilities. The new upgrades enrich content makers with enhanced performance metrics and flexible aspect ratios and various new editing features. The features, which were previously available only to business account holders, are simplified into one simple format. The new features enable users to add links to all images, videos and TV livestreams. This link in all Pins features is aimed to open up new monetization opportunities by driving more traffic and increasing connections with brands.
The company introduced new advertising tools named Premiere Spotlight and Travel catalogs to support advertisers. Premiere Spotlight will allow advertisers to scale up and reach more customers by boosting the visibility for a desired time period. Travel catalogs will enable users to plan their vacations and allow them to book vacations directly from the brand websites. These initiatives are likely to have translated into higher revenues in the quarter.
In the second quarter, Pinterest announced a collaboration with Westbrook to produce innovative and engaging content across the Pinterest platform, primarily for the Halloween and the winter holiday season. It is the latest addition to the Pinterest exclusive suite of content partners that includes Conde Nast Entertainment, Dotdash Meredith and Tastemade. This is expected to boost the top-line performance in the second quarter.
Our estimate for average revenues per user (ARPU) from the United States and Canada is pegged at $6.04. Our estimate for Europe’s ARPU is pegged at $0.79. Per our estimate, monthly active users (MAUs) from the United States and Canada are expected at 95 million in the second quarter. MAUs from Europe are approximated to be 124 million. MAUs from the rest of the world are estimated at 233.7 million.
For the June quarter, the Zacks Consensus Estimate for total revenues is pegged at $698 million, suggesting an increase from the year-ago quarter’s reported figure of $666 million. The consensus estimate for adjusted earnings per share is pegged at 12 cents, up from 11 cents reported in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Pinterest this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -15.49%. The Most Accurate Estimate is pegged at 10 cents while the Zacks Consensus Estimate stands at 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Pinterest, Inc. Price and EPS Surprise
Pinterest, Inc. price-eps-surprise | Pinterest, Inc. Quote
Zacks Rank: Pinterest currently has a Zacks Rank #2.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post a beat this season:
QUALCOMM Incorporated (QCOM - Free Report) is set to release quarterly numbers on Aug 2. It has an Earnings ESP of +3.68% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +0.07% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Aug 3.
Toyota Motor Corporation (TM - Free Report) has an Earnings ESP of +12.64% and sports a Zacks Rank of 1. The company is set to report quarterly numbers on Aug 3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar