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Pinterest shares dropped more than 20% on Wednesday after Monness Crespi Hardt downgraded the stock from “Buy” to “Neutral.” The firm said the company’s third-quarter results were “uninspiring” and its outlook for the rest of 2025 looked weak.
Analyst Brian White described the situation as “Worthy of a Weak Wednesday,” pointing to a tougher environment in some advertising areas and rising worries about competition in the age of generative AI. He said these challenges have pushed the firm to take a more cautious stance on Pinterest.
Pinterest’s third-quarter revenue came in at $1.049 billion, just below Monness’s estimate of $1.062 billion. Adjusted EBITDA was $306.1 million, with a margin of 29.2%. Earnings per share were $0.38, missing the forecast of $0.43.
White said the tone of the company’s earnings call felt “downbeat,” with management sounding cautious about ad spending among large U.S. retailers and possible tariff impacts on the home furnishings market. He also noted that Pinterest avoided giving clear details about its long-term revenue goals.
There were some bright spots. Monthly active users rose 12% to 600 million, which was higher than expected. Growth was seen across all regions. However, ad pricing fell by 24%, which offset the higher ad impressions.
Looking ahead, Monness cut its fourth-quarter revenue estimate to $1.335 billion from $1.365 billion and lowered its EPS forecast to $0.66 from $0.73. The firm warned that competition in the digital ad market remains tough and the overall business environment is still uncertain.