Cantor cuts Pinterest stock price target on ad spending weakness

Cantor Fitzgerald revised its price target for Pinterest Inc (NYSE:PINS) to $23 from $30, keeping an Overweight rating. The stock is currently priced at $18.40, down roughly 11% over the past week. Despite this, analysts believe the shares are underpriced based on current valuation metrics. The downgrade comes after Pinterest missed third-quarter revenue estimates by 3% due to a drop in ad spending, particularly from cross-border advertisers.

The company also lowered its fourth-quarter revenue guidance to 8-12% from an estimated 15%, reflecting continued pressure on ad revenue. While Pinterest has seen an increase in monthly active users by 21 million quarter-over-quarter, engagement remains robust. The firm highlights a strong balance sheet with more cash than debt, providing operational flexibility.

Pinterest's efforts to reorganize its go-to-market strategy in Europe could help stabilize revenue in future quarters. Analysts have lowered their revenue and EBITDA estimates by 6% and 8%, respectively, with the stock now trading at 7 times free cash flow.