Pinterest shares fell sharply in premarket trading, dropping roughly 22% after management provided a weaker-than-expected revenue forecast for the first quarter. The company attributed the softer outlook in part to tariff-related strain on retail advertisers, while analysts flagged a broader slowing in ad growth and increasing competitive pressure.
Forecast vs. consensus - Pinterest projected first-quarter revenue between $951 million and $971 million, below the average analyst estimate of $980.1 million. That guidance contrasted with recently stronger results reported by some peers in the social and advertising space, including Snap and Reddit, and prompted a reassessment of expectations by several brokerages.
Brokerage reactions - At least seven firms revised their ratings on the stock. Evercore cut its rating, highlighting a persistent deceleration in revenue growth and naming intensifying competition from Google, Meta, Reddit and others as a central concern. Evercore analysts also singled out the potential return of TikTok in the U.S. market and emerging ad tools from OpenAI as additional risks to Pinterest's share of ad budgets.
Bank of America also lowered its recommendation, saying that the gap between Pinterest’s growth trajectory and that of the broader sector appears to be widening. BofA pointed to tariff-driven weakness among retail advertisers and warned that AI-enabled advertising tools at larger platforms are making it more difficult for Pinterest to win new ad dollars. The bank added that the company’s margin expansion cycle looks to have peaked, which could limit near-term profit growth.
Baird reduced its rating as well, citing ongoing pressure from major advertisers and the need to reset expectations following recent restructuring. Baird noted that while user growth and engagement metrics remain healthy, Pinterest’s monetization is trailing and shareholders may see the shares trade in a limited range until execution improves.
Additional downgrades came from JPMorgan, Loop Capital, RBC Capital Markets and Citi. Those firms cited slowing demand for advertising and stronger competition as factors that may weigh on near-term revenue momentum.
Summary
Pinterest’s premarket decline followed management’s Q1 revenue guide that missed consensus, driven by softer retail ad spend and tariff impacts on retailers. Multiple brokerages downgraded the stock, citing slowing revenue growth, competitive threats from larger platforms and the potential constraints on margin and profit expansion.
Key points
- Shares fell about 22% in premarket trading after a downbeat first-quarter revenue forecast of $951 million to $971 million, below the $980.1 million analyst average.
- At least seven brokerages downgraded the stock, citing slowing advertising growth and mounting competition from Google, Meta, Reddit and others.
- Sectors affected include digital advertising, social media platforms and retail-focused ad spending, given the tie between Pinterest’s revenue outlook and retail advertiser budgets.
Risks and uncertainties
- Tariff-related pressure on retailers could continue to depress ad spending among a key advertiser segment, creating revenue headwinds for platforms reliant on retail budgets.
- Intensifying competition - both from established competitors and new entrants or tools such as OpenAI-powered ad products - may make it harder for Pinterest to capture incremental ad dollars.
- Margin expansion appears to have peaked according to some analysts, which could limit profit growth if revenue momentum does not recover.
Investors and market participants will be watching subsequent quarterly results and management commentary for signs that monetization can accelerate or that the company can reclaim ad budget share amid growing competitive and macro pressures.