Pinterest Inc PINS shares are trading higher after hours Monday following an upgrade from Evercore.
What Happened: Evercore ISI Group analyst Mark Mahaney upgraded Pinterest from In-Line to Outperform and raised the price target from $30 to $41, citing four reasons behind the change.
- Evercore sees clear evidence of stabilizing digital ad spend, which bodes well for a potential recovery in the second half of the year.
- Mahaney highlighted increasing evidence that recent operational improvements on both the user and advertising sides of the business are beginning to pay off.
- The stabilizing ad spend and operational improvements have created an inflection point. The analyst now sees material revenue growth and substantial margin improvement as a “distinct possibility” over the next two to four quarters.
- Lastly, Mahaney believes the current valuation is reasonable given Pinterest’s ability to generate EBITDA growth of 30% or better and free cash flow margins of 20% or better by 2025.
“PINS it to win it, upgrade to Outperform,” the Evercore analyst said.
Mahaney’s $41 price target is based on 30x EBITDA estimates for 2025.
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PINS Price Action: Pinterest shares were up 3.02% after hours at $33.03 at time of publication, according to Benzinga Pro.
Photo: Souvik Banerjee from Pixabay.
