Pinterest Headwinds See BofA Lower Estimates, But Analyst Optimistic About AI Solutions

BofA Securities analyst Justin Post lowered estimates for Pinterest, Inc. PINS, while maintaining a Buy rating with a price target of $39.

The analyst slightly reduced the estimates due to ongoing weakness in the F&B ad category, tough comps and foreign exchange (FX) impacts.

Fourth-quarter revenue is lowered by $4 million for FX, now expecting 16% Y/Y growth (vs. prior guide of 15%-17%), added the analyst.

Post lowered revenue estimate to $817 million and EBITDA by 7% to $132 million for the first quarter.

The analyst said concerns are rising that first quarter Street estimates may be too high and he now expects 10% revenue growth, below the 14% consensus, factoring in pressures from Leap Year/Easter, FX and F&B.

Also, for 2025, Post cut revenue by 1% to $4.1 billion and EBITDA by 2% to $1.18 billion, but expect growth to accelerate post-first quarter, reaching 15% in the fourth quarter.

Sentiment may improve in 2025 with potential acceleration post-first quarter, driven by AI solutions, 3P deals and stabilizing F&B growth, adds the analyst.

Post projected management to outline a return to long-term growth rates and highlight margin improvement despite a 15% y/y headcount increase in the third quarter.

Investors can gain exposure to Pinterest through Global X Social Media ETF SOCL and Trenchless Fund ETF RVER.

PINS Price Action: Pinterest shares are down 1.23% at $31.42 at publication Wednesday.

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