The Bull and Bear case for Pinterest

Roth Capital Partners says Pinterest (Pinterest Stock Quote, Chart, News, Analysts, Financials NYSE:PINS) delivered a clean Q2 beat, but Q3 guidance left investors debating the pace of growth.

In an Aug. 6 update,  analyst Rohit Kulkarni maintained his “Neutral” rating and $25.00 target on Pinterest.

“Pinterest delivered a clean top-to-bottom 2Q beat, however the 3Q guide bracketed Street expectations,” Kulkarni said.

Pinterest reported stronger-than-expected revenue, Adjusted EBITDA, EPS, users and average revenue per user. Monthly active users grew at a double-digit pace globally, while North America revenue accelerated to 18% year-over-year.

Kulkarni said North America benefited from stronger large-retailer spending, better return on ad spend, and continued strength in mid-market and small-business customers.

Ad pricing turned positive, rising 1% year-over-year after falling 5% in the previous quarter. Impression growth slowed to 16%.

The analyst said the quarter was an encouraging sign that Pinterest’s AI investments are translating into better advertiser returns and revenue acceleration. Pinterest Assistant, the company’s AI conversational layer, reached most U.S. users by late July and was monetized from launch.

Management also raised its 2026 Adjusted EBITDA margin outlook to about 30% from 29%, helped by first-half outperformance.

For Q3, Kulkarni said guidance only bracketed consensus despite the Q2 beat. But he said the apparent slowdown is mostly mechanical, reflecting about three percentage points of sequential pressure from foreign exchange, Prime Day timing and World Cup spending that are not expected to repeat.

“We expect shares to stay within $17-$25, implying roughly 19x to 26x ’27E EPS, and see the sell-off as a tactical entry point given the one-time nature of the Q3 comp drag,” Kulkarni said.

He said the bull case is that Pinterest’s ad-platform investments are working, pricing has turned positive, margins are expanding despite AI spending and user engagement remains strong, with a 12th consecutive quarter of record users and Gen Z now more than half the base.

The bear case is that Q3 guidance implies growth slowing to 13% to 15% from 18%, international trends are softening, GAAP results worsened to a $47-million net loss and AI compute costs are likely to keep rising.

Kulkarni said international execution remains the key debate, with Europe and Rest of World growth moderating on tough comparisons and regulatory pressure on Asia-based cross-border retailers.

He expects Pinterest to generate Adjusted EBITDA of US$1.30-billion on revenue of US$4.88-billion in fiscal 2026, improving to Adjusted EBITDA of US$1.58-billion on revenue of US$5.50-billion in fiscal 2027.

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