Pinterest Stock Slides As Layoffs Spark Fresh Growth Fears

Pinterest Inc (NYSE:PINS) shares are under pressure Wednesday afternoon as investors react to the company's newly announced restructuring and job cuts, weighing the short-term costs and uncertainty against its longer-term artificial intelligence ambitions. Here are the key details investors are watching. Pinterest stock is testing lower boundaries. What’s pressuring PINS? Pinterest Stock Falls On Workforce Reduction Plan Pinterest announced this week that it will trim its global workforce by "less than 15%" and shrink office space as part of a broad restructuring. The company expects to book pre-tax charges of about $35 million to $45 million, with the process slated to wrap up by the end of the third quarter. While management frames the move as a shift toward AI-focused roles and teams, layoffs and one-time charges often signal slowing growth or profitability pressure, prompting investors to reassess near-term earnings expectations. Restructuring Costs Add To Existing Growth Jitters The restructuring follows a weaker third-quarter sales performance that pushed analysts to cut forecasts. Pinterest is investing in AI-powered advertising and connected TV, including its recent tvScientific acquisition, to reignite growth. However, investors may worry that execution risk, transition costs and potential disruption to operations could weigh on results before these initiatives fully pay off. AI Ambitions And Deal Speculation Not Enough Ongoing speculation about a possible OpenAI acquisition and Pinterest's vision as an AI-driven shopping assistant for hundreds of millions of users offers a compelling long-term story. But on Wednesday, the immediate reality of layoffs, restructuring charges and recent soft sales are overshadowing that narrative. PINS Stock Is Facing Technical Headwinds The stock is currently trading 12.2% below its 20-day simple moving average (SMA) and 22.3% below its 100-day SMA, indicating a bearish trend. Shares have decreased 30.03% over the past 12 months and are positioned closer to their 52-week lows than highs. The RSI is at 30.81, which is considered neutral territory, while the MACD is below its signal line, indicating bearish pressure on the stock. The combination of neutral RSI and bearish MACD suggests mixed momentum. Key Resistance: $25.50 Key Support: $22.50 PINS Business Model Pinterest is a social media platform with a focus on product and idea discovery. Users leverage the platform to gather ideas on topics such as home improvement, fashion, cooking and travel. The company has more than 500 million monthly active users, with a significant portion of its revenue generated from ads shown to North American users. Earnings Growth Signals Imminent Upside Potential Investors are looking ahead to the next earnings report on Feb. 12. EPS Estimate: $0.57 (Up from $0.56 YoY) Revenue Estimate: $1.33 billion (Up from $1.15 billion YoY) Valuation: P/E of 8.2x (Indicates value opportunity) Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $38.60. Recent analyst moves include: UBS: Buy (Lowers Target to $40.00) (Jan. 20) Goldman Sachs: Buy (Lowers Target to $32.00) (Jan. 13) Morgan Stanley: Overweight (Raises Target to $35.00) (Jan. 13) Valuation Insight: While the stock trades at a value P/E multiple, the strong consensus and 2% expected earnings growth suggest analysts view this growth as justification for the 68% upside to analyst targets. Benzinga Edge Rankings Below is the Benzinga Edge scorecard for Pinterest, highlighting its strengths and weaknesses compared to the broader market: Value: Weak (Score: 62.38) — Trading at a steep premium relative to peers. Growth: Strong (Score: 95.09) — Reflects robust historical expansion in earnings and revenue. Quality: Weak (Score: 30.04) — Indicates challenges in operational efficiency and financial health. Momentum: Bearish (Score: 5.04) — Stock is underperforming the broader market. The Verdict: Pinterest’s Benzinga Edge signal reveals a classic case of growth potential overshadowed by poor momentum. While the growth score indicates strong historical performance, the weak momentum and quality scores suggest caution for investors. PINS Shares Edge Lower Wednesday PINS Price Action: Pinterest shares were down 2.14% at $22.91 at the time of publication on Wednesday, according to Benzinga Pro data. Image: Shutterstock