Here are the reasons why Pinterest stock price plummeted today.

Shares of the image browsing platform Pinterest (leg -11.43%) Pinterest stock fell sharply on Friday following the company’s fourth-quarter 2023 financial report. Pinterest shares were down 11% as of 10 a.m. ET, a significant drop. But the market honestly doesn’t seem to know how to react to the fourth quarter report. The stock has largely bounced back, falling nearly 30% in after-hours trading.

Why do markets crash?

Meanwhile, Pinterest’s fourth-quarter growth and upcoming first-quarter 2024 guidance fell short of Wall Street expectations. Meanwhile, growth is accelerating, the company has announced large new partnerships, and today many analysts are raising their price targets for the stock. If it weren’t for these positives, Pinterest’s stock price would likely have fallen even further.

Regarding growth, Pinterest reached nearly 500 million monthly active users worldwide by the end of 2023. Moreover, fourth quarter revenue increased 12% year-over-year to $981 million. This marks the company’s fourth straight quarter of accelerated growth. And driving first-quarter revenue growth of at least 15% would mark the fifth consecutive quarter of acceleration.

PINS Revenue (Quarterly YoY Growth) data from YCharts

Another noteworthy item for Pinterest in the fourth quarter was a significant improvement in profitability. By keeping operating costs in check (and even significantly reducing sales and marketing), the company has achieved a net profit of over $200 million, which equates to a strong profit margin of 21%.

Will new partnerships spur growth?

Pinterest makes money by serving ads. We recently announced an advertising partnership. Amazon It’s live now. And in their fourth quarter earnings call, they announced that their next partnerships are: alphabetIt’s Google.

Pinterest executives said that third-party partnerships did not meaningfully boost fourth-quarter performance, but that they “are now contributing more meaningfully to our growth this quarter and we expect them to continue to do so.”

So, with growth accelerating online this year and promising partnerships on the horizon, it was a little surprising to see the market sell off Pinterest stock today. I think this is a buying opportunity for investors who want to take a long-term perspective.