Snap Inc (NASDAQ:SNAP) shares jumped more than 20% on Wednesday morning after the company reported much better earnings numbers than analysts had anticipated. While Snap investors cheered the big report, one said Snap’s advertising numbers are also very good news for Pinterest Inc (NYSE:PINS).

The Pinterest Analyst: Bank of America analyst Justin Post upgraded Pinterest from Neutral to Buy and raised his price target from $45 to $58.

The Pinterest Thesis: Post said Snap’s earnings report was yet another strong signal that the online advertising market is bouncing back in the second half of 2020.

At the same time, SensorTower data suggests Pinterest mobile app downloads were up 68% in the third quarter. Post said the biggest reason to own the stock is Pinterest’s growing catalog inventory on the platform, which was up 1,000% in the second quarter compared to a year ago.

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Bank of America is now forecasting third-quarter revenue growth of 46%, well above consensus estimates of 35% growth. For the full year, Post is projecting $1.53 billion in revenue and 19 cents in EPS. Looking ahead to 2021, Post is forecasting average revenue per user of $4.47 and total revenue of $2.21 billion, ahead of consensus analyst estimates of $1.96 billion.

“We think Pinterest has the most straight-forward monetization growth path ahead and should trade at a P/S in-line or above Snap (faster user growth, less NT competition, and less content spend),” Post wrote in a note.

Benzinga’s Take: Social media apps have been as popular as ever in 2020 during the pandemic, but their advertising businesses have been challenged due to companies cutting back their marketing budgets. Now that advertising spend is starting to bounce back, these platforms could benefit from monetizing their larger, more engaged user base.