Bill Ready, CEO, Pinterest.
Anjali Sundaram | CNBC
Pinterest shares rose as much as 5% on Tuesday after company executives said they expect year-over-year revenue growth to accelerate following a slowdown in 2022 and 2023.
During its first investor day, the company called for a compound annual growth rate over the next three to five years in the mid to high teens, compared with guidance for growth in the high single digits in the third quarter. Revenue growth was under 9% last year and analysts are projecting expansion of about 8% this year.
Pinterest sees its adjusted margin for earnings before interest, taxes, depreciation and amortization reaching a percentage in the low 30s in the next three to five years. It was 15% in the second quarter.
Pinterest, which debuted on the New York Stock Exchange in 2019, saw its business gain momentum in 2020 and 2021 with the onset of the Covid-19 pandemic. The economy took a turn for the worse last year and had an outsize effect on digital ad companies. Pinterest has reduced headcount and management has taken steps to make operations more efficient.
Ben Silbermann, Pinterest’s co-founder, stepped down as CEO last year, and was replaced by Google commerce executive Bill Ready.
Now the company is focused on collaborating more effectively with retailers to help consumers buy products outside its social network. In April, Pinterest announced an advertising partnership with Amazon. Tests suggest that ads stemming from the Amazon deal are more relevant than current ads, Martha Welsh, Pinterest’s strategy chief, said at Tuesday’s event.
Pinterest shares were up 4.4% to $26.52 in afternoon trading. The stock is up 9.3% this year, trailing the Nasdaq’s 31% gain.
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Source link: https://www.cnbc.com/2023/09/19/pinterest-rallies-after-executives-say-growth-is-reaccelerating.html