Investing.com -- Pinterest shares were upgraded by Benchmark and Bernstein, as both firms cited improved engagement, stronger monetization, and AI-driven efficiencies as reasons for their increased optimism on the stock.
Benchmark upgraded Pinterest (NYSE:PINS) to Buy from Hold and set a $55 price target on the stock, stating that the company’s “engagement and monetization dynamics are now in sync” after years of underperformance in leveraging its vast first-party data.
The firm highlighted AI-powered enhancements, including whole-page optimization, which have improved Pinterest’s ad performance by automatically optimizing content elements to boost engagement.
Benchmark noted that “Performance+ lower funnel optimization/creative products have yet to monetize,” providing further upside potential.
User engagement trends have also strengthened, with weekly active users as a percentage of monthly active users rising by 100 basis points year-over-year, said the firm. Benchmark pointed out that North America and Europe are outperforming company-wide engagement trends, attributing this to Pinterest’s AI-driven recommendation improvements that incorporate more user history.
Bernstein raised its rating for Pinterest to Outperform from Market-Perform and increased its price target to $47 from $34, telling investors that “Pinterest is executing across the board.”
The firm highlighted that Q1 revenue guidance of 13-15% year-over-year exceeded expectations despite calendar headwinds. It also noted higher domestic user engagement, a growing international business, and an increased focus on lower-funnel objectives, with around 70% of ad spend now directed at direct-response advertising.
“It’s hard to pick holes anywhere,” Bernstein analysts wrote, adding that adjusted EBITDA margins expanded by five percentage points to 28% in 2024 and that management remains confident in further margin growth.
Both firms see continued momentum for Pinterest, driven by AI innovations, rising engagement, and an improving ad business, making the stock a more attractive long-term investment.