2023-07-31 15:40:53 ET
Image-sharing platform Pinterest ( NYSE: PINS ) is set to report its second-quarter earnings on Tuesday. Investors will be watching how the digital ad seller fares against its larger rivals Alphabet ( GOOGL ) and Meta Platforms ( META ) in a competitive digital ad market.
Wall Street analysts expects Pinterest to post earnings per share of $0.12 on $695.69M in revenues, which would represent an increase of 4.5% year-over-year.
Pinterest has seen notable downgrades to its earnings in the past three months. Its earnings per share forecasts have revised downwards 4 times and upwards 1 time, while its revenue estimates have revised down 5 times in contrast to 3 upward revisions.
Pinterest shares tumbled after its first-quarter results on weaker-than-expected second-quarter revenue growth forecast. Its shares have recovered since then, up nearly 27% YTD, boosted by its partnership with Amazon ( AMZN ) to display third-party ads.
Investors will be watching how Pinterest fares in an ad market where companies are sticking with bigger platforms like Meta and Alphabet, hurting smaller players. Snap stock tumbled after the company posted a glum third-quarter forecast on Tuesday . In contrast, Meta forecast third-quarter revenue above estimates , and Alphabet's second-quarter results beat both top and bottom line expectations .
According to investment firm RBC Capital Markets, Pinterest's partnership with Amazon is already live , which is earlier than expected. It noted that with the partnership already live (at least on Pinterest's mobile app), it could help drive ad load.
Seeking Alpha analyst Stone Fox Capital said, "If a Pinner can find an item on Pinterest and immediately link to the item, or buy the item directly from the site, the company has finally hit the holy grail of social commerce."
Fellow analyst Michael Wiggins De Oliveira said, "The most exciting aspect is the growing evidence of Pinterest's commerce opportunity gaining momentum."
Seeking Alpha analysts at large rate Pinterest Buy, which compares with average Wall Street rating of Buy and SA Quant rating of Hold.
For further details see:
Pinterest earnings look-ahead: Watching ad spending