Pinterest is crashing after giving light guidance in its first public quarterly report (PINS)

Reuters

Pinterest shares plunged in late Thursday trading after reporting quarterly results.
Its full-year sales guidance and adjusted loss per share disappointed.
Since the visual-bookmarking’s public debut one month ago, shares have risen 60% through Thursday’s market close.
Watch Pinterest trade live.

Pinterest shares plunged by as much as 19% in late Thursday trading after releasing its first-quarter results — its first quarterly report as a public company.

While visual-bookmarking platform reported quarterly sales that topped expectations, its sales guidance and adjusted loss per share both fell short.

Pinterest managed to narrow its net loss from the same point last year. It lost $41.4 million during the first three months of this year, narrower than the $52.7 million lost during the first three months of 2018.

"We were particularly encouraged by the strength we saw in US revenue and international user growth," Todd Morgenfeld, the chief financial officer, said in a release.

Here’s what Pinterest reported compared with what analysts polled by Bloomberg forecast:

Revenue: $201.9 million versus $200.8 million expected.
Adjusted loss per share: $0.32 versus $0.10 expected.
EBITDA: -$38.4 million versus -$42.1 million expected.
Full-year 2019 revenue outlook: $1.06 billion to $1.08 billion versus $1.09 billion expected.

Wall Street has been concerned about two things when it comes to Pinterest, which debuted one month ago as one of a slew of young, money-losing technology companies to hit the market this year.

Analysts point to worries like Pinterest’s path to profitability, and how it can compete for digital advertisement dollars against other giants like Facebook and Google.

"Despite strong fundamentals & a promising runway for future growth, we see the current risk/reward on shares as balanced given the stock performance & valuation since IPO," UBS analysts wrote on Monday.

"Risk factors include competition for digital advertising budgets, the path to profitability in coming years (compared to current margin structure) & dual-class stock structure and management stability."

The company’s "quiet period" ended earlier this week, ushering in a deluge of Wall Street commentary that reflected a pretty lukewarm view. In their reports, some analysts cautioned that Pinterest’s valuation is a bit too rich.

"We are very constructive on PINS position in mobile advertising and the company’s growth and margin cadence," Barclays analysts wrote in a Monday note to clients. "The only thing giving us pause is the current 12x 2020 revenue multiple and the track record of mobile advertising IPOs chopping around for a bit after the initial post IPO pop."

The firm carries a $28 price target on the name and an "equal-weight" view.

Wall Street is mostly neutral on the name. Of the analysts surveyed by Bloomberg, 12 recommend "hold," five say "buy," and just one recommends "sell."

Looking to the next three quarters, analysts expect further losses on increasing revenue.

Pinterest surged 7% in Thursday’s session to their highest level in two weeks. Shares were up 60% since debuting on April 18.

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