Pinterest's shares fell 16% Friday morning, following an announcement that the company's third-quarter net income didn't meet expectations. Despite reporting $898.37 million in revenue - a growth rate of 18% compared to the same period last year and narrowly exceeding predictions - the net income of $30.56 million was considerably less than the forecast $49.43 million.
Pinterest CEO, Bill Ready, commented, “Our AI investments are driving results by creating more personalized experiences and delivering greater returns for advertisers. Our fastest-growing sector is lower-funnel ad tools."
However, their Q4 outlook is less than optimistic. The projected revenue of $1.125 billion to $1.145 billion falls marginally short of analyst predictions. Analysts from JPMorgan attribute this to persisting advertorial disinterest from food and beverage industry over recent quarters.
Pinterest's AI-powered advertising features, despite boosting user engagement, are yet to be widely embraced by advertising partners. Analysts forecast that this acceptance will grow, but slowly - contributing to a price target reduction from $38 to $35.
Consequently, Pinterest's shares were valued at $28.52 by Friday noon, marking a 22% decline since the beginning of the year.