Gonna be a tough day for $PINS bulls
Here are my thoughts about Q2 ⬇️
Here are my thoughts about Q2 ⬇️
The good:
Revenue: +125% to $613 million -- Guidance was 105%, Wall Street $562 MM
Adjusted EPS -> Non-GAAP earnings $169 MM, or $0.25 → above $0.13 wall street
ARPU up big --> shows more advertisers are finding PINS a good place to buy from
Revenue: +125% to $613 million -- Guidance was 105%, Wall Street $562 MM
Adjusted EPS -> Non-GAAP earnings $169 MM, or $0.25 → above $0.13 wall street
ARPU up big --> shows more advertisers are finding PINS a good place to buy from
The BAD:
MAUs heading in the wrong direction
Yes, they are UP year-over-year, but DOWN SUBSTANTIALLY sequentially, BOTH in the U.S. & international
MAUs heading in the wrong direction
Yes, they are UP year-over-year, but DOWN SUBSTANTIALLY sequentially, BOTH in the U.S. & international
Management's reasoning:
Stay at home orders increased engagement last year
World opening up = reversal of engagement
Stay at home orders increased engagement last year
World opening up = reversal of engagement
More:
+Mobile MAUs UP 20% - web users (least engaged audience) are responsible for the decline
+Gen Z audience grew double-digits yoy
+"Shopping engagement is more resilient than overall engagement”
+ $SHOP integration 👍
+ WooCommerc integration in Q3
+Search remained elevated
+Mobile MAUs UP 20% - web users (least engaged audience) are responsible for the decline
+Gen Z audience grew double-digits yoy
+"Shopping engagement is more resilient than overall engagement”
+ $SHOP integration 👍
+ WooCommerc integration in Q3
+Search remained elevated
Guidance:
No MAU guidance, but QTD numbers are not good:
+US MAU down 7% QTD
+Intl MAU up 5% QTD
Rev “low 40s” -> market expecting 43% growth
No MAU guidance, but QTD numbers are not good:
+US MAU down 7% QTD
+Intl MAU up 5% QTD
Rev “low 40s” -> market expecting 43% growth
What's next?
+Major investment in "idea pins" --> short-form videos that drive engagement
+Major investment in "idea pins" --> short-form videos that drive engagement
More tools for advertisers:
I also LOVE this mission-driven decision:
Other thoughts:
The problem with Pinterest is that it is NOT like other social media platforms
There isn't a need to engage with it daily the same way that you engage with $FB, $SNAP, or $TWTR
That could limit long-term ARPU growth (which is my #1 thesis for this stock)
The problem with Pinterest is that it is NOT like other social media platforms
There isn't a need to engage with it daily the same way that you engage with $FB, $SNAP, or $TWTR
That could limit long-term ARPU growth (which is my #1 thesis for this stock)
The unknown:
+Have MAUs peaked? (Personally, I doubt this, but it's possible)
+Will Idea Pins increase engagement?
+Will MAUs start growing again once the tough comps normalize?
+Have MAUs peaked? (Personally, I doubt this, but it's possible)
+Will Idea Pins increase engagement?
+Will MAUs start growing again once the tough comps normalize?
Big Q: Is the thesis for $PINS busted?
If I thought the answer was yes, I would admit defeat, sell, learn, and move on
But, thesis are rarely busted from 1 earnings report, especially with COVID warping short-term engagement numbers
If I thought the answer was yes, I would admit defeat, sell, learn, and move on
But, thesis are rarely busted from 1 earnings report, especially with COVID warping short-term engagement numbers
(One of my Achilles heels as an investor is that I'm slow to buy and slow to sell. This causes me to hold losers too long.
But, I'd rather hold a loser too long than sell a big winner early.)
But, I'd rather hold a loser too long than sell a big winner early.)
$PINS could be "dead money" for a while
If you believe that the opportunity cost for owning $PINS will be high, I understand the desire to sell and own companies that are executing much better
If you believe that the opportunity cost for owning $PINS will be high, I understand the desire to sell and own companies that are executing much better
Personally, I'm not in a rush to buy or sell
I want more information
This is why I like to build positions slowly
(Also, If I'm wrong, the vast majority of my portfolio that is NOT in $PINS stock should do fine)
I want more information
This is why I like to build positions slowly
(Also, If I'm wrong, the vast majority of my portfolio that is NOT in $PINS stock should do fine)
But, to each, their own
We all invest according to our own timelines/rules
My style suits my personality best, but it might not work for you.
We all invest according to our own timelines/rules
My style suits my personality best, but it might not work for you.
As a reminder, this company:
+Just grew its revenue 125% (beat guidance)
+Profitable/cash flow positive
+Founder-led
+Mission driven
+No antitrust concerns
+Has only 1/9th the ARPU of $FB (room for growth!)
I like its long-term chances, but I reserve the right to be wrong
+Just grew its revenue 125% (beat guidance)
+Profitable/cash flow positive
+Founder-led
+Mission driven
+No antitrust concerns
+Has only 1/9th the ARPU of $FB (room for growth!)
I like its long-term chances, but I reserve the right to be wrong
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