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Pinterest (PINS) Gains But Lags Market: What You Should Know

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Pinterest (PINS) closed the most recent trading day at $20.64, moving +1.93% from the previous trading session. The stock lagged the S&P 500's daily gain of 2.76%. Elsewhere, the Dow gained 2.43%, while the tech-heavy Nasdaq added 0.13%.

Prior to today's trading, shares of the digital pinboard and shopping tool company had gained 11.39% over the past month. This has outpaced the Computer and Technology sector's loss of 15.41% and the S&P 500's gain of 4.44% in that time.

Pinterest will be looking to display strength as it nears its next earnings release, which is expected to be August 1, 2022. The company is expected to report EPS of $0.17, down 32% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $665.4 million, up 8.51% from the year-ago period.

PINS's full-year Zacks Consensus Estimates are calling for earnings of $0.81 per share and revenue of $2.95 billion. These results would represent year-over-year changes of -28.32% and +14.47%, respectively.

It is also important to note the recent changes to analyst estimates for Pinterest. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 36.67% lower within the past month. Pinterest is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Pinterest is currently trading at a Forward P/E ratio of 25. Its industry sports an average Forward P/E of 43.21, so we one might conclude that Pinterest is trading at a discount comparatively.

We can also see that PINS currently has a PEG ratio of 1.69. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software was holding an average PEG ratio of 2.37 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 137, putting it in the bottom 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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