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Pinterest (PINS) to Report Q2 Earnings: What's in Store ?

Zacks Equity Research

Pinterest PINS is set to report second-quarter 2019 results on Aug 1.

In first-quarter 2019, the company reported loss of 33 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 9 cents.

Revenues surged 53.7% year over year to $201.9 million.

Monthly Average Users (MAUs) Global increased 21.8% year over year to 291 million. While United States MAUs increased 6% to 85 million, International MAUs increased 29% to 206 million.

Factors to Consider

Pinterest’s initiative to improve user engagement by infusing Machine Learning tools into its platform is expected to accelerate conversion of searches into product purchases.

Pinterest, Inc. Price and EPS Surprise

Pinterest, Inc. Price and EPS Surprise

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

Moreover, added features like full catalog upload for retailers and video option available for all advertising objectives on Pinterest are likely to increase advertisers on the platform.

Further, expansion of its international user base is expected to be a key catalyst.

The aforesaid factors are expected to drive top-line growth in second-quarter 2019. The Zacks Consensus Estimate for revenues currently stands at $235 million, indicating growth of 46% from the year-ago quarter reported figure.

Meanwhile, the consensus mark for second-quarter loss has remained steady at 9 cents over the past 30 days.

However, Pinterest generates revenues primarily from one source – advertising. Increasing competition for ad dollars from the likes of Facebook, Amazon, Google and Twitter is a major headwind for the company.

Moreover, rapid growth in international user base is expected to hurt Average Revenue Per User (ARPU) in the to-be-reported quarter as monetization rate is low in international markets.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Pinterest has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are three stocks you may want to consider, as our model suggests that these have the right combination of elements to deliver an earnings beat this earnings season.

Zendesk ZEN has an Earnings ESP of +7.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here

Ciena CIEN has an Earnings ESP of +5.26% and a Zacks Rank #2.

CACI International CACI has an Earnings ESP of +4.02% and a Zacks Rank #2.

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