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On Friday, Goldman Sachs analyst Eric Sheridan updated the firm’s stance on Pinterest Inc (NYSE: NYSE:PINS), increasing the price target to $47.00, up from the previous $42.00, while reaffirming a Conviction Buy rating on the company’s shares. Currently trading at $33.59 with a market capitalization of $22.7 billion, Pinterest shows promising potential according to InvestingPro analysis, which indicates the stock may be undervalued based on its proprietary Fair Value model. Sheridan’s assessment followed Pinterest’s fourth-quarter earnings report for 2024, which highlighted several positive trends and strategic initiatives that the company believes will drive momentum into 2025 and beyond.
Pinterest’s Q4 results demonstrated robust revenue growth, attributed to significant user growth and engagement, as well as an increase in lower-funnel advertisement revenue. The company has maintained strong momentum with a 17.7% revenue growth over the last twelve months, while InvestingPro data shows an impressive financial health score of GOOD, supported by strong liquidity with a current ratio of 7.9x. The management team expressed confidence in the advertising revenue growth initiatives that are expected to continue building momentum. Additionally, the company is focused on achieving profitable growth, with forecasts anchored around a steady annual adjusted EBITDA margin expansion of approximately 200-300 basis points.
The analyst noted that while there might be some debate regarding the medium-term growth trajectory and the development of these initiatives throughout 2025, the first-quarter outlook and positive commentary on the overall advertising environment should alleviate investor concerns about short-term growth trends as the company heads into reporting results.
Goldman Sachs also emphasized Pinterest’s commitment to a capital allocation framework designed to mitigate dilution through buybacks. The firm’s long-term view considers Pinterest to be at the forefront of several key product initiatives, including shoppable content, direct response/bottom-funnel advertising budgets, and partnerships that aid in wider scaled monetization.
In conclusion, Sheridan reiterated the firm’s Buy rating and raised the price target, signaling confidence in Pinterest’s strategic direction and growth prospects. With analyst targets ranging from $28 to $51, investors seeking deeper insights can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research report, which provides exclusive metrics and expert analysis for informed decision-making.
In other recent news, Pinterest Inc has been the subject of several analyst revisions and corporate actions. Bernstein SocGen Group upgraded the social media company’s stock rating from Market Perform to Outperform and raised the price target to $47.00, following Pinterest’s revenue growth reported at 18% year-over-year. The firm also highlighted Pinterest’s promising Q1 revenue growth guidance of 13-15% and the company’s effective execution across various aspects of its business.
Simultaneously, Pinterest’s CEO, Bill Ready, was granted performance-based restricted stock units valued at a target of $18 million, which aims to align the CEO’s incentives with long-term shareholder value creation. The award is contingent on Pinterest’s total shareholder return relative to its peers over a three-year period.
Monness, Crespi, Hardt analysts also upgraded Pinterest’s stock from Neutral to Buy, setting a new price target of $40.00. This upgrade was based on Pinterest’s strategic initiatives, the announcement of a $2 billion stock repurchase program, and the company’s accelerated revenue growth.
On the other hand, BofA Securities maintained a Buy rating on Pinterest with a steady price target of $39.00, despite expectations of continued challenges within the food and beverage advertising sector. The firm anticipates a 16% year-over-year revenue growth for the quarter.
Lastly, Evercore ISI adjusted its price target to $43 from $45, maintaining an Outperform rating on Pinterest’s stock. The adjustment comes in response to anticipated challenges in Q1 of 2025, including difficult comparisons from the previous year and recent currency fluctuations. Despite these challenges, Evercore ISI believes that Pinterest is positioned to accelerate revenue growth throughout 2025.
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