Pinterest (PINS) dropped more than 9% on Wednesday, touching its lowest intraday price since May. The selloff came after CEO Bill Ready spoke at the Goldman Sachs Communacopia + Technology Conference and offered little comfort to investors looking for reassurance.
Ready opened by saying he was “not updating or addressing guidance” and that Pinterest does not give intra-quarter trend updates. That set the tone for what followed.
He flagged fresh pressure in international markets, pointing to new European rules that are limiting Asia-based cross-border sellers. Ready described it as “similar to what happened in the U.S. with tariffs.” The company is now rebuilding its international sales model along the lines of its U.S. playbook, but Ready warned this will create “near-term pain” before any long-term benefit kicks in.
That structural gap Ready referenced is not new, but it remains a sore spot. More than 80% of Pinterest’s users are outside the United States, yet international users account for only around 20% of revenue.
Pinterest guided Q3 revenue to $1.19 billion to $1.21 billion, which represents 13% to 15% growth. That is a step down from 18.2% growth in Q2 and only in line with what analysts had expected. Management pointed to Prime Day timing, a smaller currency tailwind, and the Asia seller pressure in Europe as reasons for the slowdown.
In Q2, Pinterest posted revenue of $1.18 billion, up 18% year over year, with monthly active users hitting a record 640 million, up 11%. The numbers were solid, but the forward guidance left investors wanting more.
The CFO departure has not helped sentiment either. Julia Brau Donnelly announced she will leave October 30 for another role. Pinterest said the exit had nothing to do with accounting or operations, and named Vikram Naidu as interim finance chief. Ready told Goldman the next CFO will need to manage more products and more geographies following the tvScientific acquisition.
PINS trades at a price-to-earnings ratio of 57.5, well above the Communication Services sector median of 16.82. That premium leaves little room for disappointment.
On the competition front, Meta and Google are pushing their own visual search and discovery tools, which is forcing Pinterest to spend more on GPUs and other infrastructure to keep pace. Those costs are squeezing near-term margins.
Pinterest has been scaling its AI ad tool, Performance+, and signed a $4 billion deal with Amazon Web Services to strengthen its computer vision and ad capabilities. Monthly active users have grown past 600 million, with strong traction among Gen Z.
Wall Street currently rates PINS a Moderate Buy, based on 11 Buy ratings and 13 Holds over the past three months. The average price target sits at $28.82, implying roughly 57% upside from current levels.
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