Business

Pinterest plunges after earnings but Wall Street analysts are sticking with the stock


"While its initial earnings report & forward commentary were roughly inline with Street estimates, we still see signs that PINS long-term narrative is solidly intact," wrote UBS analyst Eric Sheridan in his recap not to clients.


We continue to believe that Pinterest's early-stage international & self-serve offerings provide meaningful growth drivers over time, but they require strong, sustained execution & PINS cannot simply flip a switch on either one.


"The stock could remain volatile nearterm, but management laid out a compelling roadmap that should ensure ongoing strong revenue growth and a route to attractive profitability over the medium term.


We believe the company addresses a large market opportunity, is a leading player with scale, provides a strong value proposition to both consumers and advertisers, has an arguably clear path to profitability, and will benefit from several LT growth drivers.


We continue to believe a significant monetization ramp is ahead of Pinterest, and we increase out TP $1 to $26, but we maintain our Hold rating as the positive outlook is largely priced into shares in our view."


In our recent initiation (link), we framed PINS within three pivotal questions & came to the conclusion that revenue performance should meet/exceed long-term expectations, margins will ramp to profit in the coming years & upside optionality remains around visual search & social commerce.






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