Is Pinterest's Earnings Move Justified After Tripling This Year?

When Pinterest Inc. (NYSE: PINS) reported its most recent quarterly results after the markets closed on Wednesday, the social media firm said that it had $0.43 in earnings per share (EPS) on $706 million million in revenue. The consensus estimates had called for $0.32 in EPS and revenue of $645.58 million, and the fourth quarter of last year reportedly had EPS of $0.12 on $399.9 million in revenue.

Note that this stock has posted gains of more than 240% over the past 52 weeks. With a run up like this, especially the bounce after the March lows, the stock has been a screaming buy. Will it ever slow down?

In terms of the revenue breakdown, Pinterest saw global revenues increase 76% year over year. This consisted of U.S. revenues increasing 67% to $582 million and International revenues increasing 145% to $123 million.

Management noted that continued product innovation, execution and an earlier and longer holiday season helped the firm deliver 76% year-over-year revenue growth

Global monthly active users (MAUs) increased 37% year over year to 459 million. U.S. MAUs increased only 11% to 98 million, and International MAUs increased 46% to 361 million.

Average revenue per user (ARPU) grew 29% in this time to a total of $1.57. U.S. ARPU increased 49% to $5.94, and International ARPU increased 67% to $0.35.

On the books, Pinterest’s cash, cash equivalents and marketable securities totaled $1.76 billion at the end of the quarter, down from $1.71 billion at the end of the previous fiscal year.

Looking ahead to the first quarter, the company expects to see revenues growing in the low-70% year over year. Analysts are calling for a net loss of $0.02 per share and $425.51 million in revenue for the quarter.

Pinterest stock closed at $77.90 on Thursday, in a 52-week range of $10.10 to $79.15. The consensus price target is $75.85. Following the announcement, the stock was up 10% at $86.00 in the after-hours session.