Pinterest stock price target cut to $40 at TD Cowen

On Tuesday, TD Cowen maintained a Buy rating on Pinterest Inc (NYSE:PINS) but reduced the stock's price target from $46.00 to $40.00. The adjustment reflects concerns over macroeconomic factors, despite positive indicators from first-quarter advertising checks. The stock, currently trading at $25.75, has experienced a significant 18% decline over the past week. Analysts at TD Cowen highlighted a forecasted revenue growth of 14.6% year-over-year for the first quarter, building on Pinterest's impressive 19.4% revenue growth in the last twelve months. This growth is attributed to better monetization efforts and the introduction of new advertising tools.According to InvestingPro data, Pinterest currently appears undervalued based on its Fair Value analysis, with 12 additional exclusive ProTips available for subscribers.

The research firm has revised its estimates for the second quarter of 2025 through the fourth quarter of 2025, as well as its long-term projections. This revision accounts for the potential impact of weakening consumer sentiment and tariff-related issues. Despite these concerns, Pinterest maintains strong financial health with a current ratio of 8.75 and holds more cash than debt on its balance sheet. Analysts remain optimistic about Pinterest's revenue growth prospects, anticipating approximately 16% year-over-year growth in 2025, aligning with the company's impressive five-year revenue CAGR of 26%. This optimism is supported by recent advertising checks that suggest strong spending growth and increased adoption of Pinterest's Performance+ tool.

The price target adjustment to $40 from the previous $46 is a response to the broader economic uncertainties that may affect consumer behavior and spending. Despite these concerns, TD Cowen's continued Buy rating indicates their belief in Pinterest's ability to navigate the challenging environment and capitalize on its advertising potential. With a market capitalization of $17.4 billion and a P/E ratio of 9.3, Pinterest demonstrates strong fundamentals.For comprehensive analysis and detailed valuation metrics, access Pinterest's full research report on InvestingPro, which offers exclusive insights among 1,400+ top US stocks.

In their commentary, TD Cowen analysts stated, "Trimming Est's on Macro (BCBA:BMAm) Concerns Despite Positive 1Q Ad Check; We forecast 1Q revenue growth of 14.6% y/y, driven in part by improving monetization and new ad tools. We lowered our 2Q25-4Q25 and L-T ests given softening consumer sentiment and tariff impact concerns. Despite macro uncertainty, we expect ~16% y/y rev growth in '25 amid positive ad checks which suggest robust spend growth and ramping usage of Performance+. PT to $40 from $46 prior, maintain Buy."

The revised price target and maintained Buy rating by TD Cowen reflect a cautious yet optimistic outlook for Pinterest as it continues to develop its advertising platform amidst a fluctuating economic landscape.

In other recent news, Pinterest Inc. reported strong fourth-quarter earnings, surpassing consensus estimates with an 18% year-over-year revenue increase. The company's EBITDA also exceeded expectations by 6%, driven by growth in Average Revenue Per User and Monthly Active Users. This performance led TD Cowen to raise Pinterest's price target from $38 to $46 while maintaining a Buy rating, reflecting confidence in the company's strategic initiatives, including AI-led user engagement and the Performance+ advertising suite.

Guggenheim analysts also upgraded Pinterest's stock rating from Neutral to Buy, raising the price target to $40, citing robust user growth and engagement metrics. They see the recent share price dip as an attractive entry point for investors, anticipating above-average monetization growth rates. In contrast, Raymond (NSE:RYMD) James downgraded Pinterest from Outperform to Market Perform due to concerns about advertising revenue impacted by a softening Consumer Packaged Goods market and tariff implications.

Meanwhile, Snap Inc (NYSE:SNAP). faced a slight dip in its stock following a Guggenheim report analyzing audience reach and app download data, which indicated a modest deceleration in growth. Guggenheim noted that Snap's Daily Active Users guidance implied the lowest net addition since early 2019, with no significant usage increase from potential TikTok disruptions. The report also discussed Snap's new Simple Snapchat feature, which is not expected to cause meaningful disruptions. These developments highlight varying analyst perspectives on the prospects of Pinterest and Snap amidst evolving market conditions.

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