Pinterest Plummets 10% as Earnings Miss Sparks Investor Exodus – What’s Next for the Social Commerce Giant?

Summary
• Pinterest’s stock tumbles 10.7% intraday after Q2 earnings miss expectations on EPS despite revenue outperformance
• Revenue hits $998M, up 17% YoY, but adjusted EPS of $0.33 falls short of $0.35 estimates
• Guidance for Q3 revenue of $1.033–$1.053B exceeds $1.025B estimates, yet fails to offset EPS disappointment

Pinterest’s 10.7% intraday plunge has sent shockwaves through the social media sector, with shares trading at $34.965 after a volatile session that saw prices swing from a low of $33.1 to a high of $35.48. The sharp selloff follows a mixed earnings report where revenue growth outperformed expectations but EPS fell short, raising concerns about profitability and advertiser confidence. With the stock trading near its 52-week low of $23.68, investors are now scrutinizing whether Pinterest’s user growth and AI-driven ad platform can offset near-term earnings pressures.

Earnings Miss and Advertiser Uncertainty Trigger Sell-Off
Pinterest’s 10.7% drop stems from a combination of earnings disappointment and lingering macroeconomic concerns. While revenue grew 17% to $998 million, adjusted EPS of $0.33 fell 6% below the $0.35 estimate, driven by higher-than-expected costs and muted ad demand. Management highlighted ongoing advertiser hesitancy tied to U.S.-Asia e-commerce dynamics and broader market uncertainty, including tariff impacts. Additionally, the stock’s sharp decline mirrors Snap’s 15% plunge earlier in the week, as both platforms face pressure from slowing ad growth compared to Meta’s 22% revenue jump. The sell-off reflects investor skepticism about Pinterest’s ability to monetize its 578 million MAUs amid a competitive ad landscape.

Interactive Media Sector Splits as Meta Outperforms
The Interactive Media & Services sector remains polarized, with Meta (META) leading the pack. While Pinterest’s shares fell 10.7%, Meta’s stock edged up 0.06% intraday, reflecting its robust Q2 performance and $47.52 billion revenue. Reddit’s 78% YoY sales growth also outshines Pinterest’s 17% revenue increase, highlighting divergent trajectories in ad monetization. However, Pinterest’s user growth—up 11% to 578 million—positions it as a long-term play in social commerce, even as near-term earnings pressures persist.

Bearish Options and ETFs Target Key Levels Amid Volatility
• 200-day average: 32.49 (below current price) • RSI: 68.93 (overbought) • MACD: 1.00 (bullish divergence) • Bollinger Bands: 35.42–40.02 (price near lower band)

Pinterest’s technicals suggest a bearish near-term outlook, with the 200-day MA at 32.49 acting as critical support. The RSI’s overbought reading (68.93) and MACD’s 1.00 signal potential exhaustion in the short-term rally. Traders should monitor the 35.42 lower Bollinger Band as a key level; a break below could trigger further declines toward 31.79 (200D support).

Top Options Picks:
• PINS20250815C35 (Call): Strike $35, Expiry 8/15, IV 45.62%, Leverage 27.38%, Delta 0.6176, Theta -0.1667, Gamma 0.1587, Turnover 57,640
- IV (45.62%): Moderate volatility suggests balanced risk/reward
- Leverage (27.38%): Amplifies gains if price rebounds
- Delta (0.6176): Sensitive to price swings, ideal for short-term plays
- Theta (-0.1667): High time decay suits aggressive timing
- Gamma (0.1587): Strong sensitivity to price movement
- Turnover (57,640): High liquidity ensures easy entry/exit
- Payoff: In a 5% downside scenario (ST = $33.21), payoff = max(0, 33.21 - 35) = $0. This contract is best for short-term volatility plays, capitalizing on potential rebounds above $35.

• PINS20250815C36.5 (Call): Strike $36.5, Expiry 8/15, IV 42.68%, Leverage 65.93%, Delta 0.3636, Theta -0.1184, Gamma 0.1669, Turnover 4,206
- IV (42.68%): Attractive volatility for directional bets
- Leverage (65.93%): High reward potential if price stabilizes
- Delta (0.3636): Moderate sensitivity for mid-term plays
- Theta (-0.1184): Balanced time decay for 1–2 week holds
- Gamma (0.1669): Strong responsiveness to price swings
- Turnover (4,206): Sufficient liquidity for mid-term positions
- Payoff: In a 5% downside scenario (ST = $33.21), payoff = max(0, 33.21 - 36.5) = $0. This contract suits traders expecting a rebound after a consolidation phase below $36.5.

Action Insight: Aggressive bulls may consider PINS20250815C35 into a bounce above $35, while PINS20250815C36.5 offers leverage for a mid-term rebound. Both contracts benefit from high gamma and moderate IV, ideal for volatile environments.

Backtest Pinterest Stock Performance
The performance of Pinterest (PINS) after a significant intraday plunge of -11% was generally positive, with win rates and returns indicating a favorable recovery period. Here's a detailed analysis based on the backtest data:1. Frequency and Win Rates: The backtest event occurred 316 times, with a 3-day win rate of 56.96%, a 10-day win rate of 61.71%, and a 30-day win rate of 64.24%. This suggests that Pinterest tended to experience positive returns in the short term following the intraday plunge.2. Returns: The average 3-day return was 0.64%, the 10-day return was 1.81%, and the 30-day return was 3.80%. This indicates that while the immediate response to the plunge was relatively modest, Pinterest's price tended to recover and even exceed its pre-plunge levels over longer time frames.3. Maximum Return: The maximum return during the backtest period was 7.49%, which occurred on day 59 after the intraday plunge. This highlights that while the recovery was generally positive, there were instances where the stock exceeded investor expectations, providing opportunities for gains.In conclusion, Pinterest's performance after a -11% intraday plunge was mixed in the short term, but it generally recovered positively over longer periods. This is consistent with a strategy that involves holding the stock for a few days to weeks following such events, as the historical data suggests a higher probability of positive returns in the short to medium term.

Short-Term Bearish Bias Intact – Watch 32.49 Support and Sector Sentiment
Pinterest’s 10.7% drop underscores near-term bearish momentum, with technicals and fundamentals aligning toward a test of the 32.49 200-day MA. While user growth and AI-driven ad innovations offer long-term potential, immediate concerns about advertiser confidence and macroeconomic headwinds dominate. Traders should prioritize short-term bearish options like PINS20250815C35 and monitor the sector leader Meta (META), which rose 0.06% intraday, for broader market cues. A breakdown below 32.49 could trigger a retest of the 23.68 52-week low, while a rebound above 35.42 may reignite bullish momentum. Watch for 32.49 support or sector-wide ad spend trends to dictate next steps.