Oppenheimer Initiates Coverage on Pinterest with Outperform Rating, Shares Up Nearly 4%

Pinterest Inc. (NYSE:PINS) shares rose nearly 4% on Tuesday after Oppenheimer initiated coverage on the company with an Outperform rating and a price target of $45, citing the platform's strong potential for growth in the digital advertising space.

Pinterest, known for its global discovery platform, attracts high-intent users searching for products and ideas, making it well-suited for direct response advertising. The integration of relevant ads enhances the user experience, similar to the way magazines do, driving high returns for advertisers. According to the report, Pinterest is currently the fastest-growing digital ad platform outside of Meta, with third-party partnerships with Amazon and Google contributing to improved auction density and pricing.

The report incorporates insights from consumer surveys, advertiser feedback, user metric analysis, and market assessments. Although Pinterest has a smaller daily active user (DAU) base compared to other social media platforms, the report highlights potential for increased user engagement. Additionally, Pinterest's current valuation—at 12x EBITDA—is viewed as attractive, with the price target based on a projected 17x 2026 EBITDA, which represents a 4% premium over its peers, reflecting its faster growth rate of 42% from 2023 to 2026.