Analysts at Jefferies began their coverage on Pinterest (NYSE:PINS) with a Hold rating and a price target of $30, lower than the average analyst estimate of $32.81. Shares of the company fell 3.68% at the time of writing. The analysts said that Pinterest has business upside potential, citing tailwinds such as its “improving position as a commerce-focused ad platform.” They added that a boom in its ad services could bolster its revenue and help the company achieve its long-term targets.
The investment firm said the stock is already trading higher than other social networks. Indeed, in a note to clients, analysts James Heaney and Brent Thill wrote, “PINS already trades at a 10% premium to Meta (NASDAQ:META) on a growth adjusted basis despite our expectation that the company could struggle with diversifying its advertiser base and sustainably growing engagement.”
However, the analysts noted that concerns about Pinterest’s potential to drive high revenue growth were due to the nature of the platform. Unlike rivals Meta Platforms and Google’s (NASDAQ:GOOG) Youtube, which allow video content, Pinterest is “a visual discovery and search tool.” As a result, this could affect the flow of advertisements on the platform.
Nonetheless, Jefferies believes that Pinterest is one of the companies at the forefront of the digital marketing segment, which is estimated at $575 billion and growing at 8% per year.
Is PINS a Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PINS stock based on 12 Buys, 11 Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average PINS price target of $32.81 per share implies 21.20% upside potential.
