Pinterest, PINS on NYSE, has had a rollercoaster of highs and lows in the past few years. In early 2021 they reported an all-time high stock value. However, in recent times it sits at a mere 70% of that amount.

The loss in value can be attributed to the fact that the world is no longer sheltering inside and spending hours a day looking for creative ways to fill the time as it was during parts of 2020 and 2021.

It’s not all doom and gloom, though. Eagle-eyed investors will have noticed that Pinterest’s 4th quarter earnings report, indeed, has some promising points to it, which we will go over in a moment.

Although it is worth mentioning that the major indicators of slow top-line growth and less-than-stellar revenue guidance ultimately show that Pinterest isn’t quite out of the woods yet.

– ADVERTISEMENT KEEP READING BELOW –

---

User base growth

Starting with the most promising takeaway from the Q4 report, Pinterest showed a respectful 4% increase year over year in monthly active users. This comes after the last few quarterly reports showed low percentage drops in active users that ranged between 5% and 9%.

Sequentially, Pinterest’s monthly users also grew a single percent from Q3, which continues to highlight the fact that Pinterest is currently on an upswing. Pinterest management identified the investment in personalization and relevance as the key reasons for the increases in monthly users during the fourth quarter.

Financial growth

Keeping true to the ups and downs as promised in the intro, the financial section of the 4th quarter earnings report holds both positive and negative points to go over. 

The negative part is that Pinterest missed the Q4 projections of $886 million by a cool $9 million as its 8% growth it showed in Q3 slowed down to a 4% growth in Q4. 

However, growth is growth, especially considering the uncertain macroeconomic environment Pinterest operates within. As a testament to how well Pinterest is actually doing, its gigantic competitor Meta fell by 4% year over year in Q4.

The future for Pinterest looks, not quite bright, but well-lit, as it is on the path to Q1 growth as well. Early projections place this growth at a low growth rate, between about 1% and 4%, but positive nonetheless.

– ADVERTISEMENT KEEP READING BELOW –

---

Exciting announcements

Despite Pinterst’s stock being down about 70% from all-time highs, the company’s management is showing some real confidence by announcing a $500 million share repurchase program. In addition, Pinterest announced that it fully intends to exhaust these funds over the next 12 months.

The repurchase program authorization is currently 2.5% above Pinterest’s market capitalization, which emphasizes the commitment from Pinterest to long-term shareholders and providing them value through not only annual business growth but fantastic capital allocation strategies as well.

Conclusion

In summary, Pinterest’s Q4 report shows a company doing well in spite of challenging external factors. However, investors may wait for an acceleration into double-digit revenue growth before investing in the stock.