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PINS Set to Report Q1 Results: Will Top-Line Growth Boost Earnings?

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Pinterest, Inc. (PINS - Free Report) is scheduled to report first-quarter 2025 results on May 8, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 13.24%, on average. It is expected to witness top-line expansion year over year, driven by increasing user engagement in the United States, Canada and Europe. Initiatives to introduce artificial intelligence (AI) and automation-powered ad products and rising engagement among Gen Z users are positive factors. 

Factors at Play

Pinterest is witnessing greater engagement on the platform from its existing user base. The company’s focus on improving operational rigor and incorporating sophisticated AI models to enhance relevancy and personalization is likely to have generated incremental revenues in the to-be-reported quarter. It also emphasizes building new ad tools and formats to help grow the scope of monetization on the platform. Enhancements in lower funnel solutions like mobile deep linking, shopping ads and API for conversions are providing a sustained return on investment to advertisers. This will enable advertisers to measure the results and conversion rates, which will improve their decision-making.  

Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long run. The company is taking various initiatives to bring more actionable content to dramatically improve the advertising platform, which presently appears to be one of the best ad platforms for consumer discretionary brands looking for new ways to reach customers and stretch smaller ad budgets. This has resulted in a solid improvement in engagement metrics like sessions, impressions and saves across all regions. 

Rising engagement among Gen Z users is a positive factor. Management's decision to increase the accessibility of the mobile deep linking product to more advertisers has improved shoppability on the platform. These developments are expected to have a positive impact on the first-quarter results. 

Overall Expectations

Our estimate for average revenues per user (ARPU) from the United States and Canada is pegged at $6.86. Our estimate for Europe’s ARPU is pegged at $0.9. Per our estimate, monthly active users (MAUs) from the United States and Canada are expected to be 98.8 million in the first quarter. MAUs from Europe are approximated to be 143.6 million. MAUs from the rest of the world are estimated to be 297.1 million. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $845.74 million, suggesting an increase from the year-ago quarter’s reported figure of $739.98 million. The consensus estimate for adjusted earnings per share is pegged at 25 cents, up from 20 cents reported in the prior year.

Earnings Whispers

Our proven model does not conclusively 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. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.31%. 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 and EPS Surprise

Pinterest, Inc. price-eps-surprise | Pinterest, Inc. Quote

Zacks Rank: Pinterest currently has a Zacks Rank #3.

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 an earnings beat this season:

The Earnings ESP for TELUS Corporation (TU - Free Report) is +6.06% and carries a Zacks Rank of 3 currently. The company is scheduled to report quarterly numbers on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Advanced Micro Devices (AMD - Free Report) is +0.74% and carries a Zacks Rank of 3 at present. The company is scheduled to report quarterly numbers on May 6.

Fortinet (FTNT - Free Report) is set to release quarterly numbers on May 7. It has an Earnings ESP of +3.77% and a Zacks Rank #3 at present

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