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Monday, Guggenheim analysts upgraded Pinterest Inc (NYSE:PINS) stock rating from Neutral to Buy and increased the price target to $40.00, up from the previous $39.00. Currently trading at $33.99, Pinterest has attracted positive attention from Wall Street, with analyst targets ranging up to $55. The upgrade follows an assessment of Pinterest’s user growth and engagement metrics, which remain robust according to recent data. InvestingPro data shows that 11 analysts have recently revised their earnings estimates upward for the upcoming period.
Analysts at Guggenheim cite the recent dip in Pinterest’s share price as an attractive entry point for investors, considering the company’s potential for user, monetization, and profit growth. They highlight that Pinterest’s user growth has been healthy in the first quarter, and management has reported record-high user engagement levels. The company’s strong financial position is reflected in its "GREAT" financial health score on InvestingPro, supported by impressive revenue growth of 19.35% and an industry-leading gross profit margin of 79.42%.
The firm anticipates Pinterest’s user base monetization will grow at rates above the market average from 2025 to 2027. This growth is expected to be driven by increased volume and advancements in AI-enabled advertising performance. Despite potential headwinds from a challenging macroeconomic environment affecting the advertising market, Guggenheim notes Pinterest’s resilience due to its revenue stream, which largely comprises performance-based advertisers.
Guggenheim’s updated forecasts for Pinterest suggest an acceleration in investment throughout 2025. The company is poised to build upon the GAAP profitability and free cash flow achievements reported in 2024, which Guggenheim believes sets Pinterest apart from its high-growth peers in the industry.
In other recent news, Pinterest Inc has reported strong fourth-quarter earnings, surpassing consensus estimates with an 18% year-over-year revenue increase and an adjusted EBITDA of $471 million. This performance has led several analyst firms to adjust their price targets and ratings for the company. TD Cowen raised its price target to $46, citing Pinterest’s innovative advertising solutions and revenue growth initiatives. RBC Capital Markets increased its target to $50, highlighting the company’s effective strategy in enhancing user engagement and advertising content quality. CFRA further lifted its target to $53, emphasizing Pinterest’s investments in artificial intelligence and shoppable content, which are driving growth in user engagement and revenue.
Additionally, Benchmark maintained a Buy rating with a $55 target, pointing to Pinterest’s progress in monetizing its first-party data and the potential of its Performance+ products. Analysts from these firms have noted that Pinterest’s strategic initiatives, including AI-led user engagement improvements and the expansion of third-party partnerships, are contributing to its strong market position. The introduction of the Performance+ suite has been particularly well-received, with advertisers experiencing significant improvements in return on ad spend and conversion rates. As Pinterest continues to innovate and enhance its platform, these developments suggest a promising outlook for the company’s future financial performance.
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