Recent observations from Cleveland Research indicate that Pinterest (PINS, Financial) is experiencing a deceleration in advertising spending moving into April. The company managed to deliver results that were roughly aligned with expectations in the first quarter. However, concerns are emerging regarding the latter part of the year.
Partner feedback suggests a more conservative stance towards the second half as businesses prepare for potential economic downturns. In such scenarios, platforms like Pinterest, which are predominantly used for upper-funnel marketing strategies, could see reductions in advertising budgets more quickly than others.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 34 analysts, the average target price for Pinterest Inc (PINS, Financial) is $41.03 with a high estimate of $55.00 and a low estimate of $25.00. The average target implies an upside of 58.97% from the current price of $25.81. More detailed estimate data can be found on the Pinterest Inc (PINS) Forecast page.
Based on the consensus recommendation from 41 brokerage firms, Pinterest Inc's (PINS, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Pinterest Inc (PINS, Financial) in one year is $40.18, suggesting a upside of 55.68% from the current price of $25.81. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Pinterest Inc (PINS) Summary page.
PINS Key Business Developments
Release Date: February 06, 2025
- Revenue: $3.65 billion for full-year 2024, representing 19% growth.
- Q4 Revenue: $1.154 billion, up 18% year over year.
- Adjusted EBITDA: Over $1 billion for 2024, a roughly 50% increase year over year.
- Adjusted EBITDA Margin: 41% in Q4, an increase of 320 basis points from the previous year.
- Net Income: Achieved GAAP profitability for the first time since 2021.
- Monthly Active Users (MAUs): 553 million globally, growing 11% year over year.
- US and Canada MAUs: 101 million, growing 4% year over year.
- Europe MAUs: 145 million, growing 7% year over year.
- Rest of World MAUs: 307 million, growing 15% year over year.
- Ad Impressions: Grew 43% in Q4.
- Ad Pricing: Declined 18% year over year in Q4.
- Free Cash Flow: $940 million for full-year 2024, a 55% increase.
- Cash and Marketable Securities: $2.5 billion at the end of Q4.
- Share Repurchases: $600 million for full-year 2024, reducing fully diluted share count by approximately 1.7%.
- Q1 2025 Revenue Guidance: $837 million to $852 million, representing 13% to 15% growth year over year.
- Q1 2025 Adjusted EBITDA Guidance: $155 million to $170 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pinterest Inc (PINS, Financial) achieved record high global users, surpassing 550 million MAUs globally, with significant growth in the U.S. and Canada.
- The company reported its first $1 billion revenue quarter in Q4 2024, with an 18% revenue growth year-over-year.
- Pinterest Inc (PINS) delivered over $1 billion in adjusted EBITDA, marking a roughly 50% increase, showcasing profitable growth.
- The company has successfully integrated AI into its platform, enhancing user experience and advertising performance, leading to a 90% increase in clicks to advertisers.
- Pinterest Inc (PINS) achieved GAAP profitability on a net income basis for the first time since 2021, highlighting financial stability.
Negative Points
- The food and beverage subsector of CPG experienced softness, impacting overall growth, and the headwind is not fully behind the company.
- Ad pricing declined by 18% year-over-year due to increased ad impression growth and a mix shift in the auction.
- Despite strong growth, the company faces challenges in further improving the DAU to MAU ratio, particularly in mature markets.
- The company does not accept political advertising, which limited potential revenue growth during election-related spending periods.
- While third-party partnerships have been beneficial, the need for such demand is reduced as first-party business grows, potentially limiting future revenue streams from these partnerships.
