March hasn't been as kind to shares of the image-sharing platform operator (which went public in April 2019), as they fell 15.6% in the first week of this month.
Despite the pullback, shares are up 259% over the last year, versus the broader market's 29% return.
We can attribute Pinterest stock's strong performance last month to two related catalysts: the Feb. 4 release of better-than-expected fourth-quarter results and a Feb. 16 Wall Street analyst upgrade.
On Feb. 5 shares popped 5.3% following the company's earnings release. In Q4, revenue soared 76% year over year to $705.6 million, speeding by the $646 million analyst consensus estimate. Growth was driven by a 37% year-over-year surge in the number of monthly active users (MAUs) to 459 million and a 29% increase in global average revenue per user (ARPU) to $1.57.
Bottom-line performance was also impressive. Adjusted earnings per share (EPS) rocketed 258% to $0.43, easily beating the $0.32 Wall Street had expected.
On Feb. 16, shares rose 6.1% following Loop Capital raising its price target to $105 per share, 25% above where the stock had closed on the previous trading day. (Shares closed at $68.14 on Friday.)
March performance (to date)
Market dynamics are behind Pinterest stock's weak start to March. Many highly valued growth stocks that have benefited from the COVID-19 pandemic pulled back this past week.
This dynamic is largely attributable to the falling number of COVID-19 cases and deaths. Concerns about inflation heating up has also hurt some stock sectors.
Management guided for first-quarter 2021 revenue to grow in the low-70-percent range year over year.