Shares of Pinterest (PINS -0.31%) were down by double digits after the company posted first-quarter earnings, despite the report being stellar.

Revenue in the quarter jumped 78% to $485 million, beating the company's own guidance and the consensus at $473.7 million. On the bottom line, the company posted its third straight quarter of positive adjusted EBITDA at $84 million or 16% of revenue, a sign the company has become reliably profitable. On an adjusted basis, the company posted a per-share profit of $0.07, which matched estimates.

Guidance was also strong, despite uncertainty around the pandemic. The company forecast revenue growth of 105% in the second quarter to $558 million, ahead of the consensus at $530 million. 

A woman looking at a Pinterest page on an iPad

Image source: Pinterest.

Those numbers show that the business has continued to thrive during the pandemic, having benefited from increased screen time and the broader shift to digital advertising. Nonetheless, Pinterest entered the report with its stock having more than tripled over the last year, meaning high expectations were priced in.

Commentary from management in the shareholder letter seemed to explain why the stock was selling off:

"Since Q2 2020, we have noted the strong correlation between lockdowns and engagement on Pinterest. We believe that lockdowns probably pulled forward some user growth during 2020, particularly in the US where our service has been available longer. Starting in mid-March, the easing of pandemic restrictions slowed US MAU growth and lowered engagement year over year as people spent less time online. In Q1, we saw good retention of the MAUs we gained during 2020, but we still don't know if or how long this retention will last. Our understanding of future engagement levels is similarly limited."

In other words, the economic reopening is a headwind for the company, and users are likely to spend more time offline as it gets safer to return to pre-pandemic lifestyles. In its guidance, management said that monthly active users (MAUs) would be flat in the U.S. year-over-year -- though that shouldn't be a surprise, as the metric has been flat over the last three quarters at 98 million. The company saw a surge in users when the pandemic first hit, and seems to be experiencing a pull-forward effect similar to other pandemic winners like Netflix, which saw a surge in new subscribers in the first half of last year and a sharp slowdown more recently.

The long-term still looks bright

In addition to the strong results and blowout second-quarter guidance, there was plenty of evidence that Pinterest's momentum continues to build toward a massive long-term opportunity. For instance, the company just launched ads in Brazil in the first quarter, its first country in Latin America, and will launch ads in Mexico in May. Brazil is the ninth-largest economy in the world, and a reminder that Pinterest has only just begun to monetize its platform across much of the world. Though the U.S. market appears to be maturing at roughly 100 million monthly users, the company is seeing impressive growth internationally: International MAUs jumped 30% year-over-year to 380 million, and revenue was up 170% . The international segment made up about 20% of total revenue in the quarter, a record, and should help fuel revenue growth going forward.

Elsewhere, Pinterest saw solid engagement with shopping products, a favorable sign for reopening as e-commerce provides additional value for advertisers, and the company noted strong engagement from Gen Z, showing it's resonating with the youngest generation of consumers . Profitability is also ramping up quickly, which highlights the scalability of its model.

Why you should ignore the sell-off

This looks like a short-term sell-off that's based much more on the company's current valuation than its long-term trajectory. Slowing user growth is less of a concern than it might seem -- the company still has a long way to go toward monetizing its user base, and with 98 million users it already counts more than a third of adults in the U.S. as monthly users. In the first quarter, its average revenue per user in the U.S. was $3.99. By comparison, Facebook's was $34.18 in the first quarter a year ago.

After the sell-off, Pinterest stock doesn't even look that expensive. The company is on track for at least $2.5 billion in revenue this year, according to analyst estimates, meaning the stock is trading at a price-to-sales ratio of 18, lower than many slower-growing tech stocks.

Pinterest's guidance also makes clear that any slowdown in user growth isn't currently affecting the business. Even on a sequential basis revenue is expected to grow 18%, showing the forecast is more than simply lapping the weak lockdown period a year ago.

For long-term investors, a post-earnings sell-off on a mostly positive report is generally a great buying opportunity. Now looks like one of those occasions.