Bernstein cuts Pinterest stock price target on monetization challenges

Bernstein SocGen Group has revised its price target on Pinterest Inc (NYSE:PINS) downward to $22, from a previous $28, while keeping an Outperform rating. The company's stock is currently trading at $18.41, experiencing a 11% decline over the past week and a 23% decrease year-to-date. The downgrade is primarily due to ongoing monetization difficulties faced by Pinterest.

Analyst Mark Shmulik highlighted that Pinterest's ad revenue growth continues to face challenges stemming from various factors. Europe's revenue remained flat year-over-year and saw a $20 million decline quarter-over-quarter due to trade regulations that cut off advertisers from the Asia-Pacific region. Pinterest's efforts to revamp its go-to-market strategy have not been enough to counter the pressure from overly concentrated advertiser base.

Revenue trends in the United States and Canada, as well as the company's guidance, also fell short of expectations. Shmulik questioned the timeframe investors may need to see results from Pinterest's monetization initiatives. Despite these near-term challenges, InvestingPro data indicates Pinterest might be undervalued at its current price, with a P/E ratio of 46.8 and a strong 79% gross profit margin.

For readers interested in a more in-depth analysis, Pinterest offers 12 additional ProTips and a comprehensive Pro Research Report. Pinterest reported a third-quarter revenue of $1.17 billion, which was a 12% increase year-over-year but missed Wall Street expectations by about 3%. The company also provided guidance for the fourth quarter, projecting revenue growth of around 10% at the midpoint, which is also below the anticipated 15%.

Several other analysts have adjusted their price targets for Pinterest following these developments. StoneX lowered its target to $26 from $33, citing global revenue deceleration due to cross-border advertising challenges. Cantor Fitzgerald reduced its target to $23 from $30, blaming the third-quarter revenue shortfall and lowered fourth-quarter guidance.

Guggenheim decreased its target to $22 from $24, but maintained a Buy rating. Rosenblatt Securities lowered its target to $21 from $25, citing European advertising issues. UBS adjusted its target to $32 from $33, keeping a Buy rating while pointing out weaker-than-expected results and guidance.