Pinterest Earnings: We Don’t Believe a Soft Q3 Forecast Points to a Weakening Long-Term Outlook

Pinterest reported solid second-quarter results, but its revenue outlook and expense forecast for the third quarter are a bit weaker than we had expected, likely reflecting caution given some of the economic and political uncertainty that has cropped up recently. We continue to believe the firm will perform well in the years ahead as investments in the customer experience and advertising tools drive growth. We are maintaining our $43 fair value estimate, and the shares look attractive after dropping sharply on the earnings release.