Investors are laser-focused on tech companies' profitability profiles gone are the days when growth at all costs was in fashion. This is a far more risk-averse market, especially with jarring events like the SVB collapse. There's a big chance that Pinterest is set up to fail against expectations this year.

Pinterest isn't seeing tremendous user growth, and macro headwinds make it unlikely that advertiser rates will meaningfully improve - meaning the path to revenue acceleration will be precarious. Exiting Q4 of 2022, Pinterest grew revenue at only a 4% y/y clip, and its outlook for Q1 calls for only low single-digit growth in revenue. For the current fiscal year, Wall Street analysts are expecting Pinterest to generate $3.05 billion in revenue, representing 9% y/y growth. There are red flags here to be wary of:įirst, expectations for Pinterest may already be hot. I remain bearish on Pinterest in 2023, especially after reading into the company's latest results.

Profitability is the key eyesore here: though Pinterest is seeing encouraging user trends, costs are rising and eating into profitability, calling into question Pinterest's valuation. This social media stock, long considered a niche play in an industry largely dominated by Meta Platforms' ( META) Instagram and Facebook, has seen much of its year-to-date gains wiped away since the company reported results in early February. In particular, I think Pinterest ( NYSE: PINS) is in a tough spot. Year to date, most tech names have still rallied substantially, but the overhang of a tough macro environment plus early indicators that the recession may be longer-lived than we initially expected (including the collapse of Silicon Valley Bank ( SVB )) requires us to be more diligent in the names we retain in our portfolios.