On Thursday, Evercore ISI took a cautious stance on Pinterest Inc (NYSE:PINS), adjusting its price target to $43 from the previous $45, while maintaining an Outperform rating on the stock. The adjustment comes in response to anticipated challenges in the first quarter of 2025. The stock, which has seen a significant decline of over 32% in the past six months, currently trades at a P/E ratio of 94x.
According to InvestingPro analysis, Pinterest maintains strong fundamentals with 12+ exclusive ProTips available for subscribers. The firm has revised its full-year 2025 revenue and EBITDA estimates for Pinterest downward by 3%, citing a combination of difficult comparisons from the previous year and recent currency fluctuations. Despite these adjustments, Pinterest has demonstrated robust revenue growth of 17.7% over the last twelve months, with a healthy gross profit margin of 79%.
The analyst from Evercore ISI expressed concerns about the consensus revenue estimate of $844 million for Q1, which would represent a 14% year-over-year increase. This estimate is seen as slightly risky, implying a deceleration and not aligning with historical seasonal patterns, except for Q1 2024, which had unique one-time benefits. These benefits included an extra day from Leap Year, favorable foreign exchange tailwinds, and Easter occurring in the first quarter, typically a second-quarter event.
Evercore ISI also pointed out the recent significant appreciation of the US dollar, which has risen approximately 7% since late October, creating potential foreign exchange headwinds for Pinterest. The company has roughly 20% international exposure outside of the United States and Canada, which could be impacted by these currency shifts.
Despite these headwinds, Evercore ISI believes that Pinterest is positioned to accelerate revenue growth throughout 2025. This optimism is based on the company’s four product cycles: MDL, DL, 3P, and PP. Furthermore, the firm anticipates modest year-over-year margin expansion for the full year, although likely less than the expansion seen in 2024.
InvestingPro data reveals Pinterest holds more cash than debt on its balance sheet, with a strong current ratio of 7.9x, suggesting solid financial flexibility to support its growth initiatives. Get detailed insights and comprehensive analysis with InvestingPro’s exclusive research report, available for over 1,400 US stocks.
In conclusion, Evercore ISI reiterated its Outperform rating, signaling confidence in Pinterest’s ability to navigate through the upcoming quarter’s challenges and capitalize on its product innovations for sustained growth in 2025.
In other recent news, Pinterest Inc. has been the subject of multiple analyst adjustments. Piper Sandler downgraded Pinterest’s stock from Overweight to Neutral, reducing the price target to $36 from $41 due to mixed financial results and cautious growth projections. However, Pinterest reported a 17.7% revenue growth in the last twelve months and a robust gross profit margin of 78.9%.
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