Shares of popular social media site Pinterest are surging on strong earnings and revenue gains. Despite double-digit gains, and excellent ratings, Pinterest stock languished until April this year when it took off like a rocket.
Pinterest stock rose from a 23.68 low on April 7 to trade at about 34.70 on Wednesday afternoon. That's a 46% jump in 2-1/2 months, not a bad gain if you can get it. Consensus of analysts polled by FactSet is for Pinterest to continue putting up excellent profit and sales numbers this quarter. On Tuesday, shares of San Francisco-based Pinterest got an IBD SmartSelect Composite Rating upgrade to a near-best 97, up from 92 the day before.
Pinterest Has History On Its Side
The upgraded 97 Composite Rating means Pinterest stock ranks in the top 3% of all stocks overall. The change means the stock is now outpacing 97% of all other stocks in terms of key performance metrics and technical strength. History shows the top market performers tend to have a 95 or higher score as they launch their major moves.
Additionally, reports say that Pinterest could benefit, along with Meta Platforms' Facebook and Snap's Snapchat, if the Trump administration follows through with a planned delay on whether or not to ban popular China-based social media platform TikTok.
Pinterest operates a virtual "pin board" platform where members can post items related to a specific theme. That can be just about anything ranging from caring for a pet to NASCAR racing or how to build a tipi.
Pinterest also trades well above all of its major moving averages, a bullish indicator.
The question now is: Can Pinterest continue to rise? Despite its gain the last couple of months, Pinterest is still below its 52-week high 44.76 set on June 18, 2024. And it's far below its all-time high 89.90 set in February 2021.
After Forming IPO Base, A Dip And Rebound
To be fair, Pinterest is a fairly young company. It launched its initial public offering in April 2019, formed its first IPO base, dipped to a May 2022 low of 16.14, then turned up. It's been slowly working its way up toward its early post-IPO highs.
Lean How — And When — To Sell Stocks
Pinterest is currently forming a double-bottom base, with a 40.90 entry. Look for the stock to break out in heavy trade at least 40% higher than normal.
Among its other ratings Pinterest stock earns a 92 EPS Rating, which means its recent quarterly and annual earnings growth is outpacing 92% of all stocks. Its Accumulation/Distribution Rating of A shows heavy buying by institutional investors over the last 13 weeks.
The company posted 35% EPS growth for Q1 to 23-cents per share. The prior three quarters its EPS rose 38%, 43% and 6%. Top line growth came in at 16% in its latest quarter, to $855 million. The prior three periods it reported sales gains of 21%, 18% and 18%.
Pinterest earns the No. 2 rank among its peers in the Internet-Content industry group. Meta Platforms is the No. 1-ranked stock in the group.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
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