Pinterest Stock Is Popping After Hours: What's Going On?

Pinterest Inc PINS shares are trading higher after hours Monday following an upgrade from Evercore.

What Happened: Evercore ISI Group analyst Mark Mahaney upgraded Pinterest from In-Line to Outperform and raised the price target from $30 to $41, citing four reasons behind the change.

1. Evercore sees clear evidence of stabilizing digital ad spend, which bodes well for a potential recovery in the second half of the year.
2. Mahaney highlighted increasing evidence that recent operational improvements on both the user and advertising sides of the business are beginning to pay off.
3. The stabilizing ad spend and operational improvements have created an inflection point. The analyst now sees material revenue growth and substantial margin improvement as a "distinct possibility" over the next two to four quarters.
4. Lastly, Mahaney believes the current valuation is reasonable given Pinterest's ability to generate EBITDA growth of 30% or better and free cash flow margins of 20% or better by 2025.

"PINS it to win it, upgrade to Outperform," the Evercore analyst said. 

Mahaney's $41 price target is based on 30x EBITDA estimates for 2025. 

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PINS Price Action: Pinterest shares were up 3.02% after hours at $33.03 at time of publication, according to Benzinga Pro.

Photo: Souvik Banerjee from Pixabay.