For a company as predictable as Pinterest (PINS +1.50%), the stock continues to see significant volatility around earnings. Meanwhile, the latest dip in the stock has left the social media company as one of the best values in the market today. The stock is now down about 10% in 2026 and 40% over the past year, as of this writing.
Let’s dive into the company’s earnings and prospects to see why I think this is a great buying opportunity.
Today’s Change
Current Price
The pattern continues
Pinterest has followed a very predictable earnings pattern, yet the stock still gets big reactions in both directions. The company generally reports solid revenue that comes in ahead of expectations, then issues conservative guidance. Despite that, the stock has made 10% or more moves in either direction eight of the past 10 quarters.
Both the first and second quarters of this year have been good examples of this. Following its Q4 earnings report in February, Pinterest saw its stock get crushed when it forecast its revenue growth would decelerate to between 11% and 14%. However, Q1 revenue growth accelerated to its fastest pace since Q4 2024, at 18%. Meanwhile, for Q2, it forecast revenue would increase by 14% to 16%, but it once again topped expectations with growth of 18%.
Despite the company’s history of conservative guidance, investors were disappointed when Pinterest projected its Q3 revenue would rise between 13% and 15% year over year, to a range of $1.19 billion to $1.21 billion. That was right in line with analyst estimates, and if recent history is any indication, the company should comfortably top its forecast. The company also noted that its guidance takes into account the impact of shifting Amazon Prime Day from Q3 to Q2 last year and World Cup-related spending.
Pinterest’s 18% revenue growth in Q2 was driven by a 16% increase in ad impressions and a 1% increase in ad prices. The company said advertisers using its Performance+ platform are seeing better return on ad spending (ROAS), so it will be interesting to see if it can eventually command higher ad prices, similar to what Meta Platforms has achieved.
The platform saw strength across regions. U.S. and Canadian revenue rose by 18% to $800 million. European revenue jumped 12% to $213 million, while the “rest of world” segment revenue soared 38% to $87 million.
Pinterest’s monthly active users (MAUs) increased by 11% to 640 million, once again led by a nice rise in “rest of world” users, which climbed 15% to 377 million. European users grew by 7% to 157 million, although they fell sequentially. U.S. and Canadian MAUs, meanwhile, increased by 4% to 106 million.
Global average revenue per user (ARPU) climbed 7% year over year to $1.86; however, this number is heavily influenced by the regional mix. U.S. and Canadian ARPU soared by 14% to $8.30. European ARPU edged up by 4% to $1.35, while “rest of world” ARPU jumped 21% to $0.23.
Turning to profitability, Pinterest saw its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jump by 24% year over year to $311.3 million. Adjusted earnings per share (EPS) surged by 30% to $0.43, topping the $0.36 consensus, as the company significantly reduced its share count through buybacks. Looking ahead, Pinterest projected its Q3 adjusted EBITDA of between $335 million and $355 million.
Image source: The Motley Fool.
Time to buy the stock?
Pinterest is one of the best bargains in the market right now, in my view. It trades at a forward price-to-earnings ratio (P/E) of below 10.5 based on 2027 analyst estimates, while producing solid mid-to-upper teens revenue growth. Throw out quarterly market expectations; this growth stock should be trading at a much higher multiple.
Similar to Meta Platforms, Pinterest has shown that its business can be a powerful AI flywheel by using AI to improve advertiser outcomes. Meanwhile, it’s doing it without heavy capital expenditures, using a mix of its proprietary AI models and cheaper open-source models to efficiently drive growth.
If you want a cheap AI winner without heavy capex, Pinterest is a great stock to buy on this dip.
