Pinterest, Inc. PINS is scheduled to report fourth-quarter 2024 results on Feb. 6, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 17%, on average. In the last reported quarter, it reported an earnings surprise of 17.65%.

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The company 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 AI and automation-powered ad products and rising engagement among Gen Z users are positive factors.

Factors at Play

In the fourth quarter, Pinterest unveiled the Pinterest Performance+ suite, a new set of AI and automation ad products designed to enhance lower-funnel advertising for global advertisers. By integrating AI and automation features, the solution enables advertisers to optimize targeting, manage budgets, and set bids automatically, reducing campaign creation time by 50% while offering flexibility for brands to mix and match features. This development is likely to have supported the company’s top-line growth in the to-be-reported quarter. 

In addition, Pinterest is taking various initiatives to bring more actionable content to the platform from a wide range of sources such as users, creators, publishers and retailers. This has resulted in a solid improvement in engagement metrics like sessions, impressions and saves across all regions. Healthy traction in emerging verticals like financial services, automobiles and technology are tailwinds. 

The company’s focus on improving operational rigor and incorporating sophisticated AI models to enhance relevancy and personalization is commendable. Through third-party ad integration, PINS is aiming to enhance monetization opportunities in several unmonetized international markets. These factors are expected to have a positive impact on the fourth-quarter result.

Overall Expectations

Our estimate for average revenues per user (ARPU) from the United States and Canada is $8.99 Our estimate for Europe’s ARPU is $1.29. Per our estimate, monthly active users (MAUs) from the United States and Canada are expected to reach 100 million in the fourth quarter. MAUs from Europe are approximated to be 142 million. MAUs from the rest of the world are estimated to be 312.6 million.

For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $1.14 billion, suggesting an increase from the year-ago quarter’s reported figure of $981.3 million. The consensus estimate for adjusted earnings per share is pegged at 63 cents, up from 53 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, but 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 0.00%, with both pegged at 63 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 #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 QUALCOMM Incorporated QCOM is +3.34% and sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Feb. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Zillow Group, Inc. ZG is +10.44% and carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb. 11.
 
Twilio Inc. TWLO is set to release quarterly numbers on Feb. 13. It has an Earnings ESP of +3.28% and sports a Zacks Rank #1.  

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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

Zillow Group, Inc. (ZG) : Free Stock Analysis Report

Twilio Inc. (TWLO) : Free Stock Analysis Report

Pinterest, Inc. (PINS) : Free Stock Analysis Report

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