Pinterest Shares Surge As 7 Analysts Revise Forecasts After Strong Q3 Print

Shares of Pinterest Inc PINS spiked higher on Tuesday after the company reported strong third-quarter earnings.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

BofA Securities On Pinterest

Analyst Justin Post upgraded the rating from Neutral to Buy, while raising the price target from $32 to $37.

Pinterest's position versus its peers has significantly improved, as every quarter it shifts from underperformance towards outperformance, which is expected in the fourth quarter, Post said in the upgrade note.

The company has "better expense discipline than expected with potential for further margin/EBITDA upside, we are above Street for EBITDA," the analyst wrote. "Renewed confidence in new mgmt team given recent product execution and direct response (DR) disclosures," he added.

KeyBanc Capital Markets On Pinterest

Analyst Justin Patterson maintained an Overweight rating, while raising the price target from $35 to $37.

Pinterest reported its third-quarter revenues, EBITDA and MAUs (monthly active users) higher than the Street expectations, Patterson said in a note.

The company’s results “reinforce that growth is reaccelerating while expense controls remain intact, resulting in a ~600 bps inflection in 2023E EBITDA margin,” the analyst stated. “We anticipate an annual margin expansion cadence of 200-300 bps y/ y in 2024 and 2025, reflecting mid-teens growth from product innovation and partnerships,” he added.

Roth Capital Partners On Pinterest

Analyst Rohit Kulkarni reiterated a Neutral rating, while lifting the price target from $29 to $31.

Pinterest’s quarterly results were “solid” and the beat was bigger than the late-September pre-announcement, Kulkarni said.

“Surprisingly, the 4Q guide doesn't include any Oct softness,” unlike peers Meta Platforms Inc META and Snap Inc SNAP, the analyst stated. “We see partnerships and new direct-response ad products as next-six-month revenue catalysts,” he added.

RBC Capital Markets On Pinterest

Analyst Brad Erickson reaffirmed a Sector Perform rating, while raising the price target from $30 to $32.

“The business is modestly accelerating, new ad products are driving better engagement, ad load could increase further and the Amazon.com Inc AMZN partnership is ramping faster than expected,” Erickson wrote in a note.

“While execution has been solid and we remain positively biased on the name, our reservation remains how incremental is AMZN given 1p advertiser concerns we've heard in our checks and thus we continue seeking more definitive evidence of platform-wide conversion improvement as the key signal in front of bigger value creation,” he added.

Check out other analyst stock ratings.

Wedbush On Pinterest

Analyst Scott Devitt maintained a Neutral rating, while taking the price target higher from $30 to $32.

“The company is in the process of improving monetization with new tools for advertisers targeting lower funnel spending alongside stronger user engagement supported by more relevant content recommendations,” Devitt said.

“We are encouraged by the progress the company is making in both areas and come away from 3Q results with increased conviction in the intermediate-term growth trajectory,” he added.

Piper Sandler On Pinterest

Analyst Thomas Champion reiterated an Overweight rating, while lifting the price target from $35 to $37.

“Margin expansion continues as PINS raised FY23 EBITDA margin expansion to ~600 bps from ~400 bps prior,” Champion wrote. While the contribution from Amazon was limited in the quarter, the greater impact could be felt in the first quarter of 2024, he added.

“Strong engagement continues with impressions +26% y/y, roughly even between engagement and ad load,” the analyst stated. “We continue to feel confident in revenue re-acceleration into next year,” he further mentioned.

Goldman Sachs On Pinterest

Analyst Eric Sheridan reaffirmed a Buy rating, while raising the price target from $32 to $33.

Pinterest’s third-quarter results represented a “building on the momentum from the prior quarter’s earnings report and highlighting how the company is executing against key themes from its recent Investor Day in mid-September,” Sheridan wrote in a note.

“Specifically, we see platform/product initiatives aimed at driving user engagement, moving user behavior deeper into the shopping funnel, utilizing AI to capture intent signals in a manner that drivers direct response advertiser success & a focus on balancing investments in these initiatives with a multi-year margin expansion trajectory over the next 3-5 years,” he added.

PINS Price Action: Shares of Pinterest were up 17.9% to $29.58 at the time of publication Tuesday.

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