Pinterest Inc. was the hottest social-media stock of 2020, but Wall Street is growing cautious after a couple of disappointing quarters sowed doubt that new pandemic-era users will stick with the platform.
People turned to Pinterest while isolating at home last year, leading to a jump in users, along with greater online commerce and advertising spending. But that tailwind -- which fueled a 254% rally in 2020 -- appears to be waning as the economy reopens, with the number of active Pinterest users dropping in the second quarter.
Both of the company’s past two quarterly reports have been met with double-digit stock price declines, and on Monday Argus Research downgraded the stock, becoming at least the third firm to do so since the second-quarter release on July 29.
Shares are down about 15% in 2021, lagging robust gains seen at Twitter Inc., Snap Inc., and industry leader Facebook Inc. Pinterest shares fell 1.2% on Tuesday.
Despite the weaker view, none of the firms that cover Pinterest recommend selling the stock, according to data compiled by Bloomberg. Every other social-media name has at least one bearish analyst. In addition, the average analyst price target suggests the stock can rise more than 30%, a much stronger return potential than the other social-media names.
Mitch Rubin, manager of the RiverPark Long/Short Opportunity Fund, is among the investors who maintain a positive long-term view on the stock. In a phone interview, he said the focus on monthly active...
Read Full Story: https://www.bloomberg.com/news/articles/2021-08-31/pinterest-user-woes-create-rare-loser-among-digital-ad-stocks
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