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In Defense Of Pinterest? These Analysts Stay Positive After Earnings Drop

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In Defense Of Pinterest? These Analysts Stay Positive After Earnings Drop

Image-sharing social media platform Pinterest Inc (NYSE: PINS) disappointed the Street with its third-quarter report, but at least three analysts are defending the company.

The Analysts

DA Davidson analyst Tom Forte upgraded Pinterest's stock from Neutral to Buy with a $28 price target.

Deutsche Bank analyst Lloyd Walmsley maintains at Buy, price target lowered from $39 to $32.

Nomura analyst Mark Kelley maintains at Buy, price target lowered from $39 to $31.

Related Link: Pinterest's Stock Hit Hard On Q3 Sales Miss

DA Davidson: Halloween Treat For Investors

Pinterest's performance as a public company has been impressive and investors should take advantage of the "unwarranted material pullback," Forte said. Some of the encouraging readouts from the report include year-over-year sales growth of 47.1% and positive adjusted EBITDA of $3.9 million versus the Street's estimate of negative $23 million.

Pinterest also showed encouraging metrics as U.S. monthly active users (MAU) grew by 8.7% to 87 million and international MAUs rose 37.4% to 235 million.

The company showed progress in monetizing its larger international user base. While the spread remains large, the small improvement is encouraging.

"In our view, a more even sales mix highlights management's ability to execute on its large international user base, which we think could be a long-term sales catalyst," Forte wrote in a note.

Deutsche Bank: Sustainable Top-Line Path

Pinterest's "somewhat lackluster" top-line performance can be attributed to difficult comps, a slightly lower ramp in new regions, and the "chunky nature of more nascent" ad platforms, Walmsley said. Nevertheless, Pinterest boasts several catalysts to sustain top-line growth over the longer term.

Management continues to innovate on ad units, focus on its video inventory, expand to new areas and improve its ad tech. "We would take advantage of the sell-off after earnings and surrounding the lockup expiration to add to positions," Walmsley wrote.

Nomura: Plenty Of Runway

Pinterest's report shows the company is achieving some success in its Shopping features a strong quarter-over-quarter growth of 75% in catalog feeds uploaded while U.S. MAUs who engaged with the Shopping feature doubled from last quarter, Kelley said.

Price Action

Pinterest's stock, which debuted on the public market earlier this year, fell more than 20% Friday and traded around $19.88 per share at time of publication.

Latest Ratings for PINS

DateFirmActionFromTo
Nov 2019MaintainsOutperform
Nov 2019MaintainsBuy
Nov 2019MaintainsEqual-Weight

View More Analyst Ratings for PINS
View the Latest Analyst Ratings

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