Wedbush Analysts Boost Pinterest Stock Rating

Investing.com — Wedbush analysts have upgraded their price target on Pinterest (NYSE:PINS) from Neutral to Outperform, citing effective execution of user engagement and monetization strategies.

Pinterest stock rose about 1.5% in premarket trading Monday (NASDAQ:MNDY).

Analysts at Wedbush believe the company is on track to achieve growth and profits aligning with its multi-year guidance framework. Their confidence is reinforced by the expectation that Pinterest will grow adjusted EBITDA at approximately 27% CAGR over the next three years, a figure that corresponds with the company's own predictions.

Currently, the stock is trading at roughly 11.6 times Wedbush's 2026 adjusted EBITDA estimate, which the firm views as an overreaction to the third-quarter results.

Wedbush identifies several drivers that could bolster Pinterest's monetization efforts in the interim. These include:
– Expansion of third-party demand partnerships with major players such as Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL).
– Introduction of new advertising surfaces and formats.
– Continued adoption of lower-funnel advertising tools that enhance conversion rates and visibility for advertisers.
– Ongoing collaborations with resellers in markets where monetization is still emerging.

The firm also highlights potential factors that could lead to performance surpassing the company's guidance, including the cumulative effect of new monetization strategies and the easing of several headwinds affecting advertiser spending, such as sustained declines in ad pricing and weakness in consumer packaged goods (CPG).

Additionally, Wedbush suggests that the lowered expectations following Pinterest's third-quarter report result in a limited downside risk. "Investors should take advantage of this period of relative weakness, given a more attractive risk/reward for a platform with significant monetization potential ahead," remarked analysts led by Scott Devitt.