On Wednesday, BofA Securities maintained a Buy rating on Pinterest Inc (NYSE:PINS) with a steady price target of $39.00, representing potential upside from the current trading price of $31.81.
With a market capitalization of $21.5 billion, InvestingPro analysis suggests Pinterest is currently undervalued. The decision comes amid expectations of continued challenges within the food and beverage advertising sector, tougher year-over-year comparisons, and the impact of foreign exchange rates.
The firm slightly adjusted its revenue estimates, attributing a $4 million reduction for the fourth quarter solely to currency fluctuations.
Consequently, BofA now anticipates a 16% year-over-year revenue growth for the quarter, aligning with the lower end of Pinterest's guidance range of 15-17%. This projection follows Pinterest's strong performance, with InvestingPro data showing a 17.7% revenue growth over the last twelve months and an impressive Financial Health Score of "GOOD."
Last year, Pinterest experienced a notably strong first quarter, with growth accelerating by 11 percentage points quarter-over-quarter, partially due to an additional day from the leap year and an Easter timing shift. Taking into account these tough comparisons and one-time events, BofA has revised its first quarter 2025 revenue estimate down to $817 million, representing a 10% increase year-over-year, and reduced its EBITDA projection by 7% to $132 million.
For the full year of 2025, BofA has reduced its revenue forecast by 1% to $4.1 billion and its EBITDA estimate by 2% to $1.18 billion. These figures are slightly below the consensus estimates of $4.2 billion in revenues and $1.23 billion in EBITDA. Despite these adjustments, BofA Securities anticipates Pinterest's growth to accelerate after the first quarter and to exit the year with a robust 15% growth in the fourth quarter.
InvestingPro subscribers have access to 12 additional exclusive ProTips about Pinterest's growth potential and valuation metrics, along with a comprehensive Pro Research Report that provides deep insights into the company's financial health and future prospects. This outlook reflects the firm's confidence in Pinterest's potential to overcome early-year headwinds and achieve substantial growth by year-end.
In other recent news, Pinterest has experienced a series of significant developments, with financial firms adjusting their stance on the company. Evercore ISI revised its price target for Pinterest to $43, citing anticipated challenges for Q1 2025, while maintaining an Outperform rating.
The firm also adjusted its full-year 2025 revenue and EBITDA estimates for Pinterest downward by 3%. Despite this, Pinterest reported robust revenue growth of 17.7% over the last twelve months.
Piper Sandler downgraded Pinterest's stock from Overweight to Neutral, reducing the price target to $36 due to mixed financial results and cautious growth projections. The firm cited a series of mixed financial results and cautious growth projections as reasons for the downgrade.
KeyBanc reduced Pinterest's price target from $45 to $39, citing timing concerns, while maintaining an Overweight rating. Despite the lowered fourth-quarter revenue guidance, the firm views Pinterest's stock as a worthwhile investment based on its future prospects.
Wedbush upgraded Pinterest's stock rating from Neutral to Outperform, setting a new price target of $38. The firm expressed confidence in Pinterest's growth trajectory, predicting a compound annual growth rate of about 27% over the next three years for Pinterest's adjusted EBITDA.
Additionally, Pinterest announced an amendment to its corporate structure, changing its registered agent and office in the state of Delaware, reflecting internal administrative decisions rather than significant business developments.
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