Pinterest Earnings: Guidance Disappoints but the Amazon Partnership Is the Bright Spot

We were impressed with Pinterest's continuing user growth and the return of solid demand for broad-based advertising on its platform during the first quarter. In addition, Pinterest announced an advertising partnership with Amazon that should improve user monetization beginning next year. While management's second-quarter outlook for revenue and operating costs was disappointing, we remain confident that with an increasing user base, further improvement of the ad platform for direct response campaigns, the Amazon partnership, and fewer economic uncertainties, Pinterest is well-positioned to increase user monetization in the second half of 2023 and beyond. We are maintaining our $36 fair value estimate. We continue to view narrow-moat Pinterest as attractive.