This Social-Media Stock Is Down 20% Today

• Pinterest’s earnings and holiday quarter guidance fell short of forecasts, and its shares dropped in morning trading.
  

• The social media and search platform set a record for number of monthly active users.

Shares of Pinterest (PINS) plunged after the visual social media and search company missed profit expectations and gave weak holiday quarter guidance.

The company posted third-quarter adjusted earnings per share of $0.38, three cents below what analysts surveyed by Visible Alpha were looking for. Revenue rose 17% to $1.05 billion, in line with forecasts.

For the current quarter, Pinterest sees revenue in the range of $1.31 billion to $1.34 billion, while Visible Alpha analysts are anticipating $1.34 billion.

The news sent Pinterest shares down 20% in morning trading and into negative territory for the year. Shares of Snap (SNAP) and Meta Platforms (META) made far more muted early moves by comparison. (Read Investopedia’s full daily markets roundup here.)

Pinterest’s quarterly results illustrate the challenges social media platforms face as digital ad spending is slowing in North America. While the company is expanding its global audience, especially in emerging markets, it’s harder to monetize users.

In the U.S. and Canada, revenue increased 9% to $786 million, and average revenue per user (ARPU) gained 5% to $7.64. Both were below Visible Alpha estimates. Global ARPU of $1.78 was slightly less than expected.

The results and outlook offset strong user growth, with the company setting a record with 600 million monthly active users. 

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