Pinterest results 'not good on an absolute basis,' rally largely due to short squeeze - UBS

UBS analyst Lloyd Walmsley argued Tuesday that results from Pinterest (NYSE:PINS)$Pinterest, Inc.(PINS)$were underwhelming, despite a post-earnings rally in the social media company's stock.

In an interview with CNBC, Walmsley attributed the 18% surge PINS saw in premarket trading to low expectations and a short squeeze. He noted that the firm "is still seeing growth slow quite a bit."

"The numbers were demonstrably better than any conversation that we've had with investors but they're not good on an absolute basis," he said.

The UBS analyst also pointed to general relief as part of the upswing in Pinterest shares, with investors primed to expect a weak quarter after results from Snap (SNAP) and Twitter (TWTR). Walmsley also acknowledged "some indications that things are stabilizing."

"It's a tough environment for everyone but clearly better than people feared after watching what happened with Snap and Twitter for that matter," he said.

PINS jumped 18% in premarket action following the release of quarterly results that met analysts' expectations. The company also predicted revenue growth for Q3 in the mid-single digit percentage range.

It has been a rough year so far for the social media space, with contracting multiples and worries about ad spending amid signs of a slowing consumer. Going into the earnings report, PINS had fallen 45% in 2022.

@TigerStars