Rosenblatt cuts Pinterest stock price target on Europe ad weakness

Rosenblatt Securities maintained a neutral rating on Pinterest Inc (NYSE:PINS) while reducing its price target to $21 from $25, highlighting difficulties in the company's European advertising sector. The stock is currently trading at $19.92, falling short of the new target and experiencing a 10.75% decline over the past week. Despite analysts considering Pinterest undervalued at present levels, the social media platform faced challenges due to European restrictions on China-based low-cost shippers.

These new regulations targeting tariffs led to a significant decrease in advertising revenue, causing Pinterest to miss its guidance in the third quarter. Rosenblatt adjusted its valuation assumption to 9x enterprise value versus 2026 estimated adjusted EBITDA. Pinterest's valuation currently sits at 9x free cash flow and a price-to-earnings ratio of 11x adjusted EPS, excluding stock compensation, which the firm described as substantial.

The estimated EV/EBITDA multiple is 34.77, raising concerns about a premium valuation. With 11 exclusive tips provided by InvestingPro, including insights into financial health and growth prospects, Pinterest's forward price-to-earnings ratio is close to 31x on a GAAP basis. The company's net operating losses will shield taxes for a few more years, although GAAP revenue for Q3 2026 grew by 12% year-over-year but fell short of the 3% estimate by Wall Street.

Pinterest's guidance for Q4 2026 suggests 10% revenue growth, below the expected 15% target. Adjusted EBITDA guidance of $563 million also missed the Street's estimate of $612 million. Consequently, several brokerage firms have revised their price targets for Pinterest. UBS lowered its target to $32 due to weaker-than-expected third-quarter results and guidance, while Susquehanna reduced its target to $25, citing international headwinds.

Evercore ISI set a new target of $24 due to monetization challenges, and BMO Capital adjusted its target to $30, mentioning European regulatory changes as a factor. BofA Securities lowered its price target to $23, emphasizing the need for broader revenue diversification to overcome vertical-specific challenges.