Pinterest Shares Surge Following Positive Endorsements

Pinterest (NYSE:PINS) shares jumped at the open on Tuesday after receiving upbeat endorsements from Goldman Sachs and RBC Capital, both of which see significant growth potential for the social media platform.

Pinterest shares are currently up more than 1% at around $32.75 a share.

Positive Outlook from Goldman Sachs

Goldman Sachs added Pinterest to its Americas Conviction List, forecasting robust topline growth and EBITDA margin expansion. The firm is particularly optimistic about Pinterest’s growth trajectory, predicting mid-to-high teens percentage topline growth and annual EBITDA margin expansion of around 300 basis points over the next five years.

Goldman noted, “PINS is set up well to continue to compound topline growth at a mid-to-high teens percentage pace and drive steady adjusted EBITDA margin expansion.” They mentioned that the company trades at a valuation similar to Meta (NASDAQ:META) while growing cash earnings at a much faster pace.

Key drivers include increased ARPU (average revenue per user), better user engagement, and high incremental margins. Goldman set a 12-month price target of $46 for Pinterest, citing significant upside potential.

RBC Capital’s Insights

RBC Capital also emphasized Pinterest’s growth potential, particularly due to changes like implementing direct links and a partnership with Amazon (NASDAQ:AMZN). These initiatives are expected to boost ad relevance and conversion rates, improving advertiser returns on ad spend (ROAS).

RBC maintained an Outperform rating and set a price target of $48, based on a forecast of 25.5x expected 2025 EBITDA. Both investment banks noted the importance of Pinterest’s ad strategy and partnerships, with Goldman highlighting the company’s ability to leverage expanded advertising offerings, and RBC underscoring potential for higher ad load and improved engagement.