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On Monday, Evercore ISI sustained its positive stance on Pinterest Inc (NYSE:PINS), reiterating an Outperform rating with a steady price target of $50.00. The firm’s analysis suggests that Pinterest is poised to report first-quarter earnings that could modestly exceed expectations, although they caution that second-quarter guidance might lean towards a downward revision due to the prevailing economic uncertainties. According to InvestingPro data, analysts maintain a bullish consensus on Pinterest, with price targets ranging from $25 to $55. The stock currently trades at an EV/EBITDA multiple of 69x, suggesting premium valuation levels.
Evercore ISI’s assessment is based on data collected throughout the quarter and a detailed model sensitivity analysis. The current consensus among analysts for Pinterest’s first-quarter revenue is $848 million, representing a 27% quarter-over-quarter decrease, which aligns with the typical seasonal decline ranging from 25% to 32%. Additionally, the expected EBITDA of $165 million would translate to a 19% margin, with Monthly Active Users (MAU) projected to increase by 10 million from the previous quarter to 563 million. InvestingPro analysis shows Pinterest maintains strong financial health with a current ratio of 8.75x and impressive revenue growth of 19.4% over the last twelve months. The company’s next earnings report is scheduled for May 8, 2025.
Despite these stable projections, Evercore ISI exercises caution, noting that advertising spending across most categories remained relatively unchanged for much of the first quarter. However, there were signs of weakening in sectors such as Consumer Packaged Goods (CPG), Home Improvement, Fashion, and Travel towards the end of the quarter. This observed trend has led to a slightly more guarded outlook on Pinterest’s performance.
The firm’s commentary highlights the potential for Pinterest to achieve or surpass the anticipated financial metrics for the first quarter. Nevertheless, the caution expressed regarding the second quarter underscores the broader challenges posed by the macroeconomic environment, which could impact Pinterest’s future guidance and performance.
In other recent news, Alphabet (NASDAQ:GOOGL), the parent company of Google, exceeded first-quarter advertising sales estimates, reporting an 8.5% increase in revenue to $66.89 billion. This growth surpassed analysts’ forecasts and highlights Alphabet’s successful investments in artificial intelligence. Meanwhile, Pinterest is exploring partnerships with external ad tech firms like Index Exchange and Criteo to broaden its advertising reach. This strategic shift aims to make its ad inventory more accessible and competitive with giants like Meta (NASDAQ:META) and Google.
In the realm of analyst ratings, KeyBanc Capital Markets reduced Pinterest’s stock price target from $41 to $37, maintaining an Overweight rating. The adjustment reflects revised revenue and EBITDA forecasts amid advertising market challenges. Similarly, Baird adjusted Pinterest’s price target to $34 from $42, maintaining an Outperform rating, citing macroeconomic uncertainties but highlighting recent improvements in shopping ad formats and automation.
TD Cowen also revised Pinterest’s stock price target, lowering it from $46 to $40 while maintaining a Buy rating. Despite macroeconomic concerns, the firm forecasts a 14.6% year-over-year revenue growth for the first quarter, driven by improved monetization and new advertising tools. These developments underscore Pinterest’s ongoing efforts to enhance its advertising platform amid a challenging economic environment.
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