PINS stock is still a pass, Roth says

Ahead of the company’s annual analyst day, Roth MKM analyst Rohit Kulkarni remains neutral about Pinterest (Pinterest Stock Quote, Chart, News, Analysts, Financials NYSE:PINS)

The analyst says there are signs that Pinterest is looking to embrace more technology solutions at this time.

“As showcased at Pinterest’s annual ad summit this week, we believe innovation has accelerated at Pinterest over the past nine months,” the analyst wrote. “Recently, Pinterest has launched new ad formats, shopping tools, and advertiser tools as the company seems focused on building a full-funnel advertising solution. Heading into the investor day next week, we would be surprised if the company provides a two- or three-year financial target, given the uncertain near-term macro backdrop. However, any discussion around how/why user growth and/or revenue growth could re-accelerate could improve investor sentiment after next week.”

Kulkarni says he has multiple questions for management ahead of the investor day, including “what are the key drivers for monetization?”, “How is its partnership with Amazon unfolding?”, and “has Pinterest seen sustained user growth?”

In a research update to clients September 15, the analyst maintained his “Neutral” rating and one-year price target of $29.00 on PINS.

Kulkarni thinks Pinterest will post EBITDA of $547.5-million on revenue of $3.05-billion in fiscal 2023. He expects those numbers will improve to EBITDA of $705.8-million on revenue of $3.6-billion the following year.