Pinterest (PINS) Slid on Lower Than Expected Guidance

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Fred Alger Management, an investment management company, released its “Alger Mid Cap Focus Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equity markets were favorable in the third quarter of 2024 driven by a dovish monetary policy shift by the Federal Reserve (Fed) and anticipation of a soft economic landing. At the same time, Class A shares of the fund underperformed the Russell Midcap Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Alger Mid Cap Focus Fund highlighted stocks like Pinterest, Inc. (NYSE:PINS) in the third quarter 2024 investor letter. Pinterest, Inc. (NYSE:PINS) is a visual search and discovery platform that enables users to find ideas, such as recipes, home and style inspiration. The one-month return of Pinterest, Inc. (NYSE:PINS) was -7.04%, and its shares lost 5.96% of their value over the last 52 weeks. On November 19, 2024, Pinterest, Inc. (NYSE:PINS) stock closed at $29.69 per share with a market capitalization of $20.065 billion.

Alger Mid Cap Focus Fund stated the following regarding Pinterest, Inc. (NYSE:PINS) in its Q3 2024 investor letter:

"Pinterest, Inc. (NYSE:PINS) is a social media platform that enables users to search and shop products personalized to their taste, find ideas to do offline, and discover inspiring content. The platform has over 510 million global monthly active users, where over 95 million are in the U.S. We believe the company has the potential to benefit from strong product cycles due to enhanced ad stack improvements and platform optimizations. During the quarter, Pinterest reported fiscal second-quarter results in line with consensus estimates. However, shares detracted from performance after management provided fiscal third-quarter revenue guidance slightly below analyst estimates, citing foreign exchange headwinds and weaker brand advertising in the food and beverage segment. Despite these near-term challenges, we believe Pinterest remains on track with its rollout of AI-driven product tools aimed at improving content visibility and campaign efficacy, particularly to boost conversion rates for small and medium-sized businesses."

A young, stylish woman using her smartphone to find inspiration for her latest DIY project.

Pinterest, Inc. (NYSE:PINS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held Pinterest, Inc. (NYSE:PINS) at the end of the third quarter which was 61 in the previous quarter. In the third quarter, Pinterest, Inc. (NYSE:PINS) delivered $898 million in revenues, up 18% year-over-year. While we acknowledge the potential of Pinterest, Inc. (NYSE:PINS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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