Pinterest Shares Crash Despite Earnings Beat: Analysts Give Mixed Reviews

Shares of Pinterest Inc PINS tumbled in early trading on Friday, despite the company reporting a first-quarter earnings beat. Here are some key analyst takeaways from the earnings call.

RBC Capital Markets On Pinterest

Analyst Brad Erickson maintained a Sector Perform rating, while reducing the price target from $30 to $28.

Pinterest’s first-quarter report “featured disappointing out-qtr commentary which overshadowed management's ongoing bullishness around rising engagement & monetization” as well as the 3P media partnership announced with Amazon.com Inc AMZN, Erickson said.

"Improvement in engagement & campaign performance continues not translating to the P&L suggesting other structural forces/headwinds are at play," the analyst stated. The deal with Amazon could be “spun negatively in the event PINS' ROAS doesn't show step-function improvement over time,” he added.

KeyBanc Capital Markets On Pinterest

Analyst Justin Patterson reiterated an Overweight rating and price target of $32.

Solid growth in time spent “is creating more monetizable opportunities, such as the new Amazon partnership,” Patterson said in a note. Pinterest’s margin expansion is “still on track when normalizing for expense shift from 1Q to 2Q,” he added.

“As economic conditions normalize and product cycles manifest, we expect Pinterest can return to >20% growth with >20% EBITDA margin,” the analyst further wrote.

Check out other analyst stock ratings.

Benchmark On Pinterest

Analyst Mark Zgutowicz reaffirmed a Hold rating on the stock.

“Despite healthier than expected MAU acceleration in 1Q, we continue to assess limited ARPU growth potential following PINS’ clear pivot to cost cuts in 2H23,” Zgutowicz wrote in a note.

“Management’s expected S&M cuts on growth initiatives will only further mitigate potential for digital market share gains, and subsequent ARPU languish relative to peers,” he added.

Piper Sandler On Pinterest

Analyst Thomas Champion maintained an Overweight rating, while reducing the price target from $32 to $31.

Pinterest guided to higher-than-expected operating expenses for the second quarter, despite recent layoffs, Champion stated.

“Revenue re-acceleration may be delayed one more quarter, but we see a lot of optionality with PINS,” he added.

PINS Price Action: Shares of Pinterest had declined by 16% to $22.94 at the time of publishing Friday.