Loop Capital Raises Pinterest Price Target by 14% on Strong Q1 Performance

Loop Capital's Rob Sanderson raised their price target on Pinterest (NYSE: PINS) by 14% from $43 to $49 on 2024/05/06. The analyst maintained their Strong Buy rating on the stock.

Sanderson's price target hike followed an assessment of Pinterest's 2024/04/30-dated Q1 2024 earnings report. According to Sanderson, the stock's bull case has been building for a while, and it looks like it has reached its turning point.

Sanderson noted that the company is performing well across all four growth drivers: users and engagement, ad load, lower funnel capabilities, and increasing affiliate demand. This positive assessment of Pinterest's performance in Q1 2024 is supported by the company's financial results.

For Q1 2024, Pinterest reported earnings per share (EPS) of $0.20, which beat the Zacks Consensus Estimate of $0.14 and Q1 2023's $0.08. The company also reported revenue of $740 million, surpassing the Zacks Consensus Estimate of $700 million and Q1 2023's $603 million. Additionally, Pinterest achieved a record 518 million monthly active users (MAUs), representing a 12% year-over-year increase.

Looking ahead to Q2 2024, Pinterest's management provided optimistic guidance. They expect revenue to range between $835 million to $850 million, reflecting a growth rate of 18% to 20% year-over-year. The company also anticipates operating expenses (Opex) of $490 million to $505 million.

Pinterest's CEO, Bill Ready, expressed satisfaction with the company's performance in Q1 2024. He highlighted the achievement of surpassing half a billion monthly active users and the robust 23% revenue growth, which marks the fastest user and revenue growth since 2021. Ready attributed this success to investments in artificial intelligence (AI) and shoppability, which have resulted in greater returns for advertisers and improved performance budgets. He also emphasized the company's execution, product launches, and finding its best product market fit in years.

In addition to the price target hike on Pinterest, Sanderson also raised their price target on Amazon.com Inc by 4.7%, from $215 to $225, while maintaining a Strong Buy rating.

The analyst sentiment towards Pinterest is generally positive. Currently, 75% of top-rated analysts rate PINS as a Strong Buy or Buy, with 25% considering it a Hold. No analysts currently recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Pinterest's upcoming year will deliver earnings per share (EPS) of $0.37. If the analysts' predictions come true, PINS's next yearly EPS will increase by 66.2% year-over-year.

In terms of stock performance, since Pinterest's latest quarterly report on 2024/04/30, the stock price has risen by 23.7%. Year-over-year, the stock has witnessed an impressive increase of 91.7%. During this period, Pinterest has outpaced the S&P 500, which has risen by 25.2%.

Rob Sanderson, the Loop Capital analyst who raised the price target on Pinterest, is ranked in the top 17% of Wall Street analysts by WallStreetZen. With an average return of 9.2% and a 55.8% win rate, Sanderson specializes in the Industrials and Consumer Cyclical sectors, among others.

Pinterest, Inc. is a visual discovery engine that provides inspiration for individuals in various aspects of their lives, including recipes, home and style ideas, and travel destinations. The company's engine offers personalized visual recommendations based on users' tastes and interests. Originally known as Cold Brew Labs Inc., Pinterest, Inc. was founded in 2008 and is headquartered in San Francisco, California.

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