Pinterest Rallies On Q3 Results, Analysts Say Platform Becoming An E-Commerce Play

Pinterest Inc PINS shares were trading higher Thursday after the company reported better-than-expected third-quarter EPS and sales results.

The platform saw an increase in users under the age of 25 and growth in search usage, suggesting that Pinterest is becoming an increasingly relevant shopping site.

The Pinterest Analysts: BofA Securities analyst Justin Post maintains a Buy rating on Pinterest and raised the price target from $58 to $72.

MKM Partners analyst Rohit Kulkarni upgraded Pinterest from Neutral to Buy and raised the price target from $35 to $66.

Morgan Stanley analyst Brian Nowak maintained an Overweight rating and raised the price target from $47 to $73.

JPMorgan analyst Doug Anmuth upgraded Pinterest from Neutral to Overweight and raised the price target from $57 to $75.

KeyBanc Capital Markets analyst Justin Patterson maintained an Overweight rating and raised the price target from $60 to $76.

The Pinterest Takeaways: Pinterest's user average revenue per user growth and engagement remained robust, with total MAU increasing to 441 million, up 37% year-on-year, BofA's Post said in a note. 

“International growth drove the majority of global MAU expansion, and users under age 25 continued to grow faster than the total,” the analyst said. 

Overall third-quarter engagement including impressions, closeups, saves and search volume moderated somewhat from second-quarter highs but remained well above pre-COVID-19 levels, he said. 

"We think the increase in under 25 users and growth in search usage suggest Pinterest is becoming an increasingly relevant shopping site." 

Facebook Ban Sends Users To Pinterest: Pinterest saw accelerating spending from advertisers that joined the platform during the Facebook boycott, Morgan Stanley analyst Brian Nowak said in a note.

“We expect these bullish digital ad trends to continue into the shelter-in holiday as retailers/brands merchants invest/experiment more in digital to reach shoppers," the analyst said. 

Pinterest's Automated Ads Working: Automated advertising is working at Pinterest, with mid-market advertisers becoming more active as Pinterest's product offering with respect to automated bidding and measurement has improved, MKM Partners' Kulkarni said in a note. 

The advertisers who tried Pinterest during the 2020 Facebook ad boycotts have continued to use Pinterest since July, and the number of active advertisers accelerated at Pinterest during the third quarter, the analyst said. 

Pinterest has made improvements associated with Stories, Video Ad Units and Shoppable Pins that are increasing engagement and leading to higher ad unit conversions, he said. 

Pinterest is still in the early stages as far as shopping on the platform is concerned, according to MKM. 

PINS Price Action: Pinterest shares were trading up 35.44% at $66.04 at last check Thursday. The stock has a 52-week high of $68.59 and a 52-week low of $10.10.

Related Link: Pinterest Pops 20% On Big Q3 Earnings Beat

Photo courtesy of Pinterest. 

Posted In: BofA SecuritiesBrian NowakDoug AnmuthJPMorganJustin PattersonJustin PostKeyBanc Capital MarketsMKM PartnersMorgan StanleyRohit KulkarniAnalyst ColorEarningsNewsUpgradesPrice TargetReiterationAnalyst RatingsMoversTrading Ideas