Why Pinterest (PINS) Outpaced the Stock Market Today

In the latest trading session, Pinterest (PINS) closed at $18.92, marking a +1.28% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 1.15%. On the other hand, the Dow registered a gain of 1.38%, and the technology-centric Nasdaq increased by 1.38%.

Prior to today's trading, shares of the digital pinboard and shopping tool company had gained 5.12% outpaced the Computer and Technology sector's loss of 5.27% and the S&P 500's loss of 5.69%.

Analysts and investors alike will be keeping a close eye on the performance of Pinterest in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.22, indicating a 4.35% decline compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $961.89 million, up 12.5% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.75 per share and a revenue of $4.78 billion, indicating changes of +9.38% and +13.15%, respectively, from the former year.

Any recent changes to analyst estimates for Pinterest should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.72% higher. As of now, Pinterest holds a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Pinterest has a Forward P/E ratio of 10.65 right now. For comparison, its industry has an average Forward P/E of 19.04, which means Pinterest is trading at a discount to the group.

It's also important to note that PINS currently trades at a PEG ratio of 0.43. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 1.07 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 163, this industry ranks in the bottom 34% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Pinterest, Inc. (PINS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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