What's Going On With Pinterest Stock Wednesday?

Pinterest, Inc PINS stock traded higher Wednesday, maintaining the Tuesday rally after executives announced their anticipated accelerated year-over-year revenue growth following a slowdown in 2022 and 2023.

During its first investor day, the company projected a compound annual growth rate in the mid to high teens over the next three to five years, a significant increase compared to the previous guidance of high single-digit growth in the third quarter, CNBC reports. 

Pinterest's revenue growth was less than 9% last year, and analysts had estimated around 8% growth for this year.

Also Read: Amazon's Enhanced Shopping Features: A Challenge to Google and Pinterest

The company also expects its adjusted margin for earnings before interest, taxes, depreciation, and amortization to reach a percentage in the low 30s within the next three to five years, a substantial improvement from the 15% reported in the second quarter.

Pinterest, which went public on the New York Stock Exchange in 2019, experienced substantial growth in 2020 and 2021 during the Covid-19 pandemic. 

However, the economic downturn in 2022 negatively affected digital advertising companies, including Pinterest. To address this, Pinterest reduced its workforce and implemented efficiency measures.

The company's focus has shifted towards collaborating more effectively with retailers to facilitate consumer product purchases outside its social network.

 A notable development was the advertising partnership with Amazon.Com Inc AMZN announced in April, with tests indicating that this partnership's ads are more relevant than current ads.

Pinterest's finance chief, Julia Donnelly, updated her expectations for third-quarter revenue growth, now expecting to be at the high end of the high single-digit range. Additionally, the company allocated $1 billion for new share repurchases.

Price Action: PINS shares are up by 5.34% at $27.61 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.