Zinger Key Points
- The company could generate more than 30% EBITDA margins in the long term, the analyst says.
- Pinterest’s aim is to “make every product that a user encounters shoppable.”
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Pinterest Inc PINS has been in focus this week on insider sales and RBC Capital Markets bumped up the price target by 15%.
The platform is likely to experience steady user growth going forward and growing engagement, “driven by international and increasing personalization,” according to Raymond James.
The Analyst: Aaron Kessler initiated coverage of Pinterest with an Outperform rating and a price target of $33.
The Thesis: The company has a “unique visual discovery platform” and its users typically have high commercial intent, which makes the platform attractive for advertisers, Kessler said in the initiation note.
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The analyst expects Pinterest to generate more than 10% revenue growth in the long term, driven by:
- Investments in Pinner products including increasing personalization.
- Investments in rich media content including video.
- Increasing relevance of its platform to emerging audiences, like Gen Z.
- Investments in new ad products and capabilities as well as advertiser expansion
- Pinterest’s aim to “make every product that a user encounters on Pinterest shoppable.”
- International monetization, as “Pinterest is still early on in its journey of international monetization.”
Kessler added that the company could generate more than 30% EBITDA margins in the long term.
PINS Price Action: Shares of Pinterest had risen by 1.54% to $27.75 at the time of writing Thursday.
Image: Courtesy of Pinterest
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