In mid-April, Cleveland Research analyst Chandler Converse released a report on social media company Pinterest (PINS) warning that the quarter was looking weak. That was a great call. When Pinterest announced its first quarter results on Tuesday, the stock fell – it fell 13% to $ 67. It’s important to note that the stock price has already had an epic run. Just a year ago, shares were trading at $ 16, so pulling back is not unreasonable. The numbers in the earnings report were pretty strong. Revenue rose 78% to $ 485 million, compared to the street consensus of $ 474 million. The company also exceeded forecasts on the bottom line. Adjusted earnings were eleven cents a share, and Wall Street analysts were looking for 7 cents a share. However, this wasn’t enough for Wall Street as the report also had some red flags. User growth For a social networking platform like Pinterest, user growth is the most important metric. This is critical to long term monetization and mindshare for advertisers. However, the first quarter for Pinterest showed some weakness in user metrics. MAUs (Monthly Active Users) rose 30% to 478 million, but analysts estimate it required 480.5 million. It looks like the main reason was the impact of the reopening of the U.S. economy, according to Pinterest’s letter to shareholders. From mid-March onwards, user engagement declined as people had less time to spend online. One of the silver linings is that retention stayed strong. However, Pinterest has found that it is not clear how long this will take. In other words, the company is cautious about its projections. (See Pinterest Stock Analysis on TipRanks) Conclusion On Pinterest Stocks User growth patterns are certainly worrying, but it’s important to think about the bigger picture. The fact of the matter is that Pinterest has a large user base and is still growing. Plus, the platform has some notable advantages. First, Pinterest doesn’t have the divisive and hateful content issues that other social networking platforms have in common. This is definitely a huge benefit for advertisers as they don’t have to worry about damaging their brands or alienating customers. For the most part, Pinterest has created a civil and enjoyable environment. Second, the company represents the next level in e-commerce. While traditional websites like Amazon are all about finding goods efficiently, Pinterest instead focuses on empowering users to create immersive experiences. This should help improve conversions for transactions. During the profit call, Pinterest boss Benjamin Silbermann remarked: “We also noticed that product search has increased by more than 20 times year-on-year. Increasingly, people see Pinterest as a place to not only get inspiration but also shop. “After all, Pinterest still has a lot of time to monetize in international markets. For example, there was encouraging progress in the quarter in Brazil, the first Latin American market. Wall Street weighs in, given the decline in Pinterest stock, the valuation is more reasonable – especially for investors looking for the long term. Based on data from TipRanks, the average analyst price target of $ 89.57 suggests upside potential of about 35% from current levels. With 14 purchases and 9 holds, Pinterest remains a moderate buy. Disclosure: Tom Taulli is long on Pinterest stocks. Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be construed as an invitation to buy or sell any security.