- Analysts at Evercore ISI trimmed the price target for Pinterest to $25 from $40, while downgrading the stock to ‘In Line’ from ‘Outperform’.
- The firm said Pinterest’s fundamentals are “clearly deteriorating,” with the company’s revenue decelerating over the past three quarters.
- Pinterest’s revenue growth slipped from 17% year-on-year in the second quarter to 16% in the third, and 13% in the fourth quarter.
Pinterest Inc. (PINS) shares were down more than 21% in Friday’s pre-market session amid a slew of price target cuts and downgrades from analysts after the company’s fourth-quarter (Q4) revenue missed Wall Street expectations.
Pinterest reported earnings per share (EPS) of $0.67 on revenue of $1.32 billion, compared to Wall Street estimates of an EPS of $0.67 on revenue of $1.33 billion, according to TheFly.
The company’s first quarter (Q1) revenue guidance also fell short of Wall Street expectations. Pinterest said it expects Q1 revenue to be in the range of $951 million to $971 million, while the consensus estimate stood at $981.28 million.
Price Target Cuts, Downgrades Pour In
Pinterest’s Q4 revenue miss and the weak Q1 forecast led to a series of price target cuts and downgrades. Analysts at Evercore ISI trimmed the price target for Pinterest to $25 from $40, while downgrading the stock to ‘In Line’ from ‘Outperform’.
The firm said Pinterest’s fundamentals are “clearly deteriorating,” with the company’s revenue decelerating over the past three quarters. Pinterest’s revenue growth slipped from 17% year-on-year in the second quarter (Q2) to 16% in the third quarter (Q3) and 13% in Q4. The company now expects 11% to 14% revenue growth in Q1, with a midpoint of 12.5%, suggesting another quarter of decelerating growth.
Analysts at BofA downgraded Pinterest to ‘Neutral’ from ‘Buy’ while trimming the price target to $19 from $39. The firm said it expects AI-driven rivals such as Alphabet Inc.’s (GOOG, GOOGL) and OpenAI to become increasingly competitive, and that Pinterest’s margin expansion cycle appears to have reached an end.
Barclays cut its price target for Pinterest to $25 from $36 while keeping an ‘Equal Weight’ rating. The firm said that Pinterest is in a “challenging spot” amid the AI disruption narrative.
Loop Capital analysts downgraded Pinterest to ‘Hold’ from ‘Buy’, while trimming the price target by 60% to $18 from $45. The firm said that it will take Pinterest “several quarters at least” to restore investor confidence.
Pinterest Stock Under Pressure
Pinterest stock has been under pressure, declining nearly 33% over the past month and about 53% over the past year.
Analysts at Evercore ISI noted that they are increasingly concerned about rising competitive intensity from Google, Meta Platforms Inc. (META), Reddit Inc. (RDDT), and other platforms.
Analysts at BMO Capital pointed out that another reason for Pinterest’s weak performance was that President Donald Trump’s tariffs disproportionately impacted some of the largest retailers, resulting in reduced advertising spend, which reflected in Pinterest’s Q4 being “soft.”
How Did Stocktwits Users React?
One bearish user stated that Pinterest’s management “fumbled the bag for shareholders.”
Another user said that “no one can compete with Meta,” following Pinterest’s Q4 results.
PINS stock is down 28% year-to-date and 53% over the past 12 months.
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