Shares of Pinterest dipped 10% on Tuesday and hit a new 52-week low after Guggenheim downgraded the stock from Buy to Neutral, citing user declines. Guggenheim also lowered its price target from $46 to $39.

Based on data from Pinterest Ads Manager, Guggenheim said the company’s aggregate global audience reach dipped to 218.1 million users by the end of December from 226.9 million in November.

“This reflects the second consecutive sequential decline, though decreasing off the largest total audience reach of 2021 in October (229.3mm),” the firm said in the Tuesday note. The company also cited data from Apptopia, a third party research firm, which indicated a sequential decline in average daily downloads through Dec. 15. It would mark the fourth month of consecutive sequential decline month over month, Guggenheim said.

Guggenheim now expects Pinterest to report 438 million monthly active users for the fourth quarter. The firm had expected 447 million users.

“We still see value creation potential for the company’s large global user base and high-purchase-intent user behavior,” the firm said. “However, 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. Without user growth, we see risk of further valuation multiple contraction.”

Shares of Pinterest underperformed compared to its social media peers in 2021, with the stock trading down nearly 45%. The company had started the year off strong as people turned to the social media giant during the Covid-19 pandemic, but user interest appeared to wane as the economy reopened. The company’s market cap was around $21 billion as of Tuesday afternoon.

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