Please ensure Javascript is enabled for purposes of website accessibility

Why Pinterest Stock Soared Today

By Joe Tenebruso – Updated Oct 29, 2020 at 2:44PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The social media platform's growth dazzled investors.

What happened 

Shares of Pinterest (PINS -1.88%) rocketed higher on Thursday following the visual discovery engine's blockbuster third-quarter results. As of 2:15 p.m. EDT, Pinterest's stock was up more than 28%. 

So what

Pinterest's revenue surged 58% year over year to $443 million, fueled by a 37% jump in global monthly active users (MAUs) to 442 million. The gains were driven by strong growth in international markets as well as a shift in advertising spending to online channels during the coronavirus pandemic.

"More than ever before, people are coming to Pinterest to get inspiration for their lives -- everything from planning early for a socially distant Halloween to creating great home schools for their kids," CEO Ben Silbermann said in a press release.

A person is pointing to an upwardly sloping line.

Investors bid up Pinterest's stock price on Thursday following its Q3 financial report. Image source: Getty Images.

Better still, Pinterest's profitability improved dramatically. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $93 million, up from less than $4 million in the year-ago period. Pinterest's adjusted earnings per share (EPS), meanwhile, rose to $0.13 from $0.01. That was well ahead of Wall Street's estimates for adjusted EPS of $0.03.  

Now what

Management sees more good times ahead. The company expects growth to accelerate in the fourth quarter, with revenue rising by 60%. "We're extremely pleased with the broad-based strength of our business, driven by recovering advertiser demand as well as positive returns from our investments in advertiser products and international expansion," Chief Financial Officer Todd Morgenfeld said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Pinterest. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.