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On Friday, Citi analyst Ronald Josey increased the price target for Pinterest Inc (NYSE:PINS) shares to $41.00, up from the previous target of $38.00, while reiterating a Buy rating. Josey highlighted the company’s positive first-quarter results, which he believes demonstrate the effectiveness of Pinterest’s investments in artificial intelligence and advertising products. According to InvestingPro data, Pinterest’s stock currently trades at $27.86, with analyst targets ranging from $25 to $51, suggesting significant potential upside. The company maintains strong financial health, earning a "GREAT" overall score from InvestingPro’s comprehensive analysis.
Josey’s analysis pointed out that Pinterest’s Monthly Active Users (MAUs) grew by 10% year-over-year, and the company saw strong advertising revenue momentum along with a margin expansion of approximately 310 basis points year-over-year. The analyst emphasized that these results affirm the company’s success in securing a larger portion of the more resilient, always-on performance advertising budgets across various verticals. Additionally, Pinterest is benefiting from increased demand throughout the entire sales funnel. InvestingPro data reveals impressive revenue growth of 17.81% over the last twelve months, with a robust gross profit margin of nearly 80%.
Pinterest’s Performance+ has been outperforming traditional campaigns in 80% of A/B tests, according to Josey. The recent launch of Return on Ad Spend (ROAS) Bidding and investments in new measurement tools are expected to drive broader adoption of the company’s Conversion API (CAPI) and Direct Links.
Looking ahead, Josey mentioned that Pinterest’s second-quarter revenue guidance, which forecasts year-over-year growth of 12-15%, indicates healthy advertiser demand trends. This is particularly noteworthy as the company overcomes headwinds from the Food & Beverage sector and broadens its focus beyond Retail and e-commerce.
In conclusion, Josey reiterated the Buy/High Risk rating for Pinterest stock and raised the price target to $41 from $38, citing the expected revenue momentum to deliver expanded EBITDA.
In other recent news, Pinterest Inc. reported its first-quarter 2025 earnings, revealing a notable revenue increase, although earnings per share (EPS) slightly missed forecasts. The company posted revenue of $855 million, surpassing expectations of $848.27 million, while its EPS of $0.23 fell short of the anticipated $0.26. Despite the minor EPS miss, Pinterest’s stock experienced a significant surge in aftermarket trading. The company’s revenue grew 16% year-over-year, and its adjusted EBITDA margin improved by 300 basis points to 20%, demonstrating operational efficiency. Additionally, Pinterest launched a new AI visual search model to enhance content recommendations, reflecting its strategic focus on innovation. The company expects second-quarter 2025 revenue to range between $960 million and $980 million, representing a 12-15% growth. Analysts from firms such as Barclays (LON:BARC) and Goldman Sachs have shown interest in Pinterest’s strategic initiatives and its ability to leverage AI for user engagement and advertiser performance. These developments indicate Pinterest’s continued focus on expanding its AI capabilities and product offerings.
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