Pinterest (PINS – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Morris from Guggenheim maintained a Hold rating on the stock and has a $38.00 price target.
Geoff Meacham has given his Hold rating due to a combination of factors including Pinterest’s performance in the fourth quarter and its near-term growth prospects. The platform experienced a significant increase in global monthly active users (MAUs), surpassing expectations with a 16 million net addition compared to the anticipated 6 million. Despite this strong user growth and a 2% year-over-year increase in MAUs in the UCAN region, Pinterest’s quarterly revenue growth of 12% only matched their guidance and fell slightly short of external forecasts. The decline in pricing, which accelerated from the previous quarter, was partially offset by an increase in ad impressions.
Moreover, while Pinterest’s partnerships with Amazon and the newly announced collaboration with Google to leverage Google’s Ads Manager for international market monetization are promising, they are expected to be more meaningful contributors to growth in the upcoming quarters. The revenue guidance for the first quarter is closely aligned with analyst predictions, suggesting steady but not exceptional growth. Management’s expectation of further Adjusted EBITDA margin expansion in 2024, albeit at a modest level compared to the significant 660 basis points expansion in 2023, reflects cautious optimism. This balanced outlook, combined with the current valuation, supports the retention of a Neutral rating and a $38 price target on the stock.
According to TipRanks, Morris is a 5-star analyst with an average return of 12.1% and a 53.10% success rate. Morris covers the Communication Services sector, focusing on stocks such as Snap, Meta Platforms, and Alphabet Class A.
In another report released today, Roth MKM also maintained a Hold rating on the stock with a $38.00 price target.
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Pinterest (PINS) Company Description:
Founded in 2000, California-based Pinterest, Inc. provides a visual discovery engine in the United States and internationally. The company operates a pinboard-style photo-sharing website and allows users to create and manage theme-based image collections such as events, interests, and hobbies.
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