Stock Story -
What Happened: Shares of social commerce platform Pinterest (NYSE: NYSE:PINS) jumped 5.6% in the morning session as the major indices soared (Nasdaq +1.9%, S&P +1.2%) after Walmart (NYSE:WMT)'s earnings and retail sales data revealed strong consumption patterns in the U.S. economy.
Walmart exceeded analysts' revenue and EPS expectations in Q2'2024. Moving on, the company raised its full year outlook for net sales and EPS as well, another major positive.
CFO, John David Rainey added "We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don't see any additional fraying of consumer health."
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What is the market telling us: Pinterest’s shares are quite volatile and over the last year have had 8 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago, when the stock dropped 17% on the news that the company reported second-quarter earnings results. Pinterest increased its number of users, leading to small revenue and adjusted EBITDA beats. On the other hand, its revenue guidance for the next quarter missed analysts' expectations. Overall, this was a mixed quarter for Pinterest, with the guidance likely dragging down shares.
Pinterest is down 14.6% since the beginning of the year, and at $30.88 per share it is trading 31.3% below its 52-week high of $44.98 from June 2024. Investors who bought $1,000 worth of Pinterest’s shares 5 years ago would now be looking at an investment worth $964.85.
