On Wednesday, Jefferies adjusted the price target for Pinterest Inc (NYSE:PINS), lowering it to $47.00 from the previous $52.00, while maintaining a Buy rating on the stock.
The revision follows the company's second-quarter results, which were slightly above market expectations with revenue surpassing estimates by 1%. However, a forecasted revenue growth slowdown in the third quarter to 17-19% year-over-year (excluding foreign exchange effects) fell short of investor expectations, which anticipated growth in the low twenties percentage at the higher end, noted an analyst from Jefferies.
The analyst attributed the expected third-quarter slowdown to macroeconomic weaknesses in the Consumer Packaged Goods (CPG) sector, rather than issues related to competition or advertising products. Despite the reduction in revenue and EBITDA estimates for the fiscal year 2024 by 2% and 3% respectively, the firm's stance on Pinterest remains positive.
Meanwhile, Goldman Sachs (NYSE:GS) adjusted its outlook for Pinterest, reducing the price target to $46.00 while maintaining a Buy rating. The firm applauded Pinterest's consistent revenue and margin trajectory, and highlighted the company's strategic moves towards advertiser vertical diversification and third-party partnerships.
Wolfe Research initiated coverage on Pinterest with a Peerperform rating, setting a fair value range between $33-$57. In addition, Piper Sandler reaffirmed its Overweight rating on Pinterest, maintaining a price target of $52.00.
InvestingPro Insights
In light of the recent analysis by Jefferies on Pinterest Inc (NYSE:PINS), current data from InvestingPro provides additional context for investors considering the stock. With a market capitalization of $25.52 billion and a high price-to-earnings (P/E) ratio of 169.45, Pinterest reflects a significant valuation in the market. However, the adjusted P/E ratio for the last twelve months as of Q1 2024 stands at a lower 99.18, suggesting a potential reevaluation of the company's earnings capacity in the near term.
InvestingPro Tips highlight that Pinterest holds more cash than debt on its balance sheet and is expected to see net income growth this year. These factors could provide a degree of financial stability and optimism for future profitability. Additionally, the company's stock is currently in oversold territory according to the Relative Strength Index (RSI), which might interest investors looking for potential entry points. For those seeking further insights, InvestingPro offers an array of additional tips, with 12 more tips available to help users make informed decisions.
For investors seeking to delve deeper into Pinterest's financial health and stock performance, they can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro. This could be a valuable tool for analyzing the company's high revenue growth of 22.8% in Q1 2024 and assessing whether the current stock price aligns with the fair value estimates from analysts and InvestingPro's own fair value assessment.
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