Pinterest (PINS) shares tumbled nearly 10% on Tuesday after Guggenheim downgraded the discovery platform's stock to Neutral from Buy over concerns of slowing user trends.
Data indicates "continued usage weakness and another quarter of below-consensus results," wrote Guggenheim analyst Michael Morris.
He went on to write, "we don’t see the platform’s use case as developing as rapidly as peers, creating risk that competitors improve their social commerce offerings more quickly than Pinterest capitalizes on its position."
Morris's research data shows user slowdowns for the second consecutive month and downloads also pointing to declines. Furthermore, the analyst highlights social media competitor SNAP (SNAP) is seeing persistent usage momentum into 2022.
Pinterest shares came off their all-time highs last year after reporting a daily active user slowdown in the second quarter as the economy reopened.
The stock's decline of more than 40% in 2021 sharply contrasted its performance during the prior year, when lockdowns kept users hooked on seeking visual inspirations for home upgrades and other projects. Shares of Pinterest surged more than 250% in 2020.
In October, Pinterest's stock surged on reports that payments giant PayPal (PYPL) was mulling an acquisition of the image-based platform. No acquisition was ultimately pursued.
Pinterest shares are listed as one of the top five trending tickers on Yahoo Finance, amid their biggest intraday decline since October.
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