What Pinterest’s latest earnings mean for investors

Pinterest (PINS) just reported second quarter results that combined record user metrics, higher revenue and a raised profitability outlook. The stock fell after management guided to slower third quarter revenue growth.

The company reported second quarter sales of US$1,179.65 million compared with US$998.23 million a year earlier. Despite this, Pinterest moved from net income of US$38.76 million to a net loss of US$46.67 million, with diluted earnings per share from continuing operations shifting from earnings of US$0.06 to a loss of US$0.08.

For the first half of 2026, sales were US$2,187.17 million versus US$1,853.22 million in the prior year period. Over the same span, Pinterest moved from net income of US$47.68 million to a net loss of US$120.26 million, while diluted earnings per share from continuing operations went from earnings of US$0.07 to a loss of US$0.20.

Management also issued guidance for the third quarter of fiscal 2026, expecting revenue between US$1,190 million and US$1,210 million. That range implies year over year growth of 13% to 15%, with leadership flagging a modest foreign exchange headwind and higher spending on AI computing infrastructure.

Alongside the formal numbers, management highlighted record monthly active users of 640 million and described AI as central to Pinterest’s product and advertising plans. Recent efforts include improvements to Pinterest Assistant, more targeted ad tools and Smart Assembly, which management said is improving click through rates.

The company also raised its full year adjusted EBITDA margin target to roughly 30%, according to management commentary. At the same time, leadership cautioned that international growth could face pressure through the third quarter and that heavier AI related investment is expected to weigh on near term profitability.

Despite the mix of higher revenue, record users and a stronger adjusted margin target, Pinterest shares were reported to have fallen around 8% to 9% in extended and pre market trading after the release. The key issue for many investors appeared to be the softer third quarter revenue outlook and the signal of higher AI infrastructure costs.

Over the past year Pinterest’s share price return has moved lower, with the 1-year total shareholder return down 40.44%, even though the 90-day share price return of 9.69% suggests some recent momentum that contrasts with the weaker year to date share price return of 12.16%.

If Pinterest’s AI push has you thinking about where else technology is reshaping business models, it can be useful to scan a wider field using the 56 AI infrastructure stocks

With Pinterest shares down sharply on the guidance update yet still up over the past quarter, the real tension is between stepping in after this pullback or waiting for an even cheaper entry as the AI spend ramps.

Most Popular Narrative: 15.9% Undervalued

Based on the most followed narrative, Pinterest’s fair value of $27.75 sits above the latest close at $23.33, which puts a spotlight on the assumptions driving that gap.

Ongoing advancements in AI-driven visual search and personalized content curation, supported by proprietary multimodal and generative retrieval models, are deepening user engagement and increasing session times, which should drive higher average revenue per user (ARPU) and lift both revenue and margins over time.

Want to see what kind of revenue path and margin profile that implies for Pinterest? The most followed narrative leans on earnings growth assumptions and a richer profit mix. Curious which assumptions have the biggest impact on that $27.75 figure and how sensitive it is to change?

Result: Fair Value of $27.75 (UNDERVALUED)

However, there is still meaningful risk that weaker ad pricing or slower international monetization progress could leave Pinterest short of the earnings path behind that fair value story.

Another View on Pinterest’s valuation

The first narrative suggests Pinterest is around 15.9% undervalued based on a fair value of $27.75. Yet on earnings, the stock looks expensive. Pinterest trades on a P/E of 53.1x, compared with a fair ratio of 33.2x, a peer average of 24.8x and an industry average of 17.1x. How comfortable are you paying that kind of premium for execution risk?

Next Steps

Given the mix of concerns and optimism running through this Pinterest story, it makes sense to review the underlying data yourself and decide quickly where you stand. To see both sides laid out clearly and pressure test your own view, take a closer look at the 2 key rewards and 1 important warning sign.

Looking for more Pinterest investment ideas?

If Pinterest has sharpened your focus on where to put fresh capital, now is the time to widen your lens and compare it with other potential opportunities.

• Scan for strong balance sheets and steady fundamentals by running the solid balance sheet and fundamentals stocks screener (49 results).
• Hunt for companies that trade below their assessed value and see what stands out in the 50 high quality undervalued stocks.
• Spot potential future standouts before they are widely followed by checking the screener containing 19 high quality undiscovered gems.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.