Pinterest Stock Is Moving Higher Tuesday: What's Going On?

Pinterest Inc PINS shares are trading higher Tuesday following an upgrade from Evercore. 

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

First, Evercore sees clear evidence of stabilizing digital ad spend, which bodes well for a potential recovery in the second half of the year, the analyst said.

Mahaney also highlighted increasing evidence that recent operational improvements on both the user and advertising sides of the business are beginning to pay off.

The stabilizing ad spend and operational improvements have created an inflection point, Mahaney said. The analyst now sees material revenue growth and substantial margin improvement as a "distinct possibility" over the next two to four quarters.

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.

The Evercore analyst's $41 price target is based on 30x EBITDA estimates for 2025. "PINS it to win it, upgrade to Outperform," Mahaney said. 

Keybanc analyst Justin Patterson also maintained Pinterest with an Overweight rating on Tuesday and raised the price target from $32 to $35.

See Also: Jack Dorsey Mocks Mark Zuckerberg For Sending A Follow Request On Threads: "Too Soon"

PINS Price Action: Pinterest shares were up 3.64% at $30.21 at the time of writing, according to Benzinga Pro.

Photo: Hassas Arts from Pixabay.