What happened

Shares of Pinterest (NYSE:PINS) were flying higher last month as the social media company recouped some of its losses from March after it reported preliminary first-quarter earnings, and benefited from better-than-expected earnings reports from its social media peers.

According to data from S&P Global Market Intelligence, the stock finished April up 34%. The stock moved higher in multiple stages and also benefited from broader gains in the S&P 500 index.

PINS Chart

PINS data by YCharts

So what

Pinterest shares fell sharply in March on concerns about the spreading coronavirus pandemic, but the company made up much of those losses as investor sentiment improved, and some saw the growth stock as a bargain.

A woman looking at a Pinterest board on her iPad

Image source: Pinterest.

Shares first began to recover on April 8, rising 11.8% after the company reported preliminary results for the first quarter. Though management pulled its guidance for the year, it also posted better-than-expected numbers in the first quarter. Global monthly active users rose from 335 million at the end of the fourth quarter of 2019 to 365 million-367 million, much better than estimates of 345 million. Revenue was expected to be $269 million to $272 million, representing 34% growth at the midpoint, which was also better than expectations. The company acknowledged weakness across the ad market starting in mid-March, but had a strong business performance earlier in the quarter and noted record levels of engagement among users during the crisis.

Later in the month, the stock jumped 14.2% on April 22 after social media peer Snap turned in a strong first-quarter earnings report, featuring impressive revenue and user growth, that boosted investor confidence in the sector. The stock also gained in the last week of the month after Alphabet's earnings report assuaged fears about a collapse in the digital ad market .

Now what

Pinterest is set to report first-quarter earnings on May 5. Given the company's preliminary report, investors already have a sense of what to expect in user and revenue growth, but the bottom line is still a mystery. Analysts are expecting a loss of $0.09 per share, but management commentary on the second quarter will be the main attraction here. Google and Facebook said in their earnings reports that ad demand was beginning to recover, so investors may expect the same from Pinterest.

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