Fed’s Powell opens door to potential rate cuts at Jackson Hole
On Tuesday, Benchmark analyst Mark Zgutowicz revised the price target for Pinterest Inc (NYSE:PINS) to $45, down from the previous $55, while reiterating a Buy rating on the company’s shares. The adjustment comes ahead of Pinterest’s first-quarter earnings report, set to be released after the market closes on Thursday, May 8. According to InvestingPro data, Pinterest maintains a "GREAT" financial health score, with robust fundamentals including a strong balance sheet and impressive gross profit margins of ~79%.
Zgutowicz’s report indicates a reduction in the first quarter and full-year 2025 revenue estimates to $848 million and $5.154 billion, respectively. This conservative forecast is attributed to the current macroeconomic conditions. Despite the adjustments, the analyst suggests that the revenue and Average Revenue Per User (ARPU) expectations for Pinterest’s markets in the United States, Canada, and Europe remain on the cautious side. The report specifically notes the potential for continued growth in Europe, following positive trends seen in the fourth quarter. InvestingPro data shows Pinterest’s revenue grew by 19.4% in the last twelve months, with the company generating over $3.6 billion in revenue.
The analyst also lowered the adjusted EBITDA projections for the first quarter and full year of 2025 to $164 million and $1.276 billion, respectively. This reflects an anticipated margin expansion of +240 basis points year over year for 2025, compared to the +520 basis points seen in 2024. Zgutowicz believes these targets are achievable and could potentially be exceeded.
Pinterest’s stock is currently trading at a discount, noted as a five-turn discount to its one-year average next twelve months (NTM) Enterprise Value/Adjusted EBITDA, which stands at 12.3 times. This valuation is below the lows experienced in June 2022. The benchmark analyst emphasizes that Pinterest’s midpoint guidance for first-quarter total revenue suggests a possible acceleration in growth, underscoring the stock’s relative undervaluation for the quarter to date. InvestingPro analysis reveals additional valuable insights about Pinterest’s valuation and growth prospects, with 8 more exclusive ProTips available to subscribers. Get access to the comprehensive Pro Research Report, which provides deep-dive analysis of Pinterest among 1,400+ top US stocks.
In conclusion, while the price target has been lowered, the Buy rating is maintained, with the new target reflecting the revised estimates and an increased Weighted Average Cost of Capital (WACC).
In other recent news, Pinterest Inc. is expected to report first-quarter earnings that may slightly exceed expectations, with analysts projecting a revenue of $848 million and an EBITDA of $165 million. Evercore ISI maintains an Outperform rating with a price target of $50, despite caution about second-quarter guidance due to economic uncertainties. Pinterest is also exploring partnerships with ad tech firms like Index Exchange and Criteo to broaden its advertising reach, moving away from relying solely on internal sales tools. This strategic shift aims to increase ad inventory access and attract a wider pool of marketers, potentially boosting revenue in a cautious ad spending environment.
Meanwhile, KeyBanc Capital Markets adjusted Pinterest’s price target to $37, citing advertising market challenges and a revision of revenue and EBITDA forecasts for 2025 and 2026. Despite these headwinds, KeyBanc maintains an Overweight rating, highlighting Pinterest’s potential for valuation expansion as economic conditions stabilize. Similarly, Baird adjusted its price target to $34 while maintaining an Outperform rating, emphasizing Pinterest’s recent improvements in shopping ad formats and automation. Analysts from both firms suggest that Pinterest’s strong user engagement and monetization initiatives could make it an appealing investment as the macroeconomic picture becomes clearer.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.