By Sam Boughedda
Loop Capital cut its price target on Pinterest (NYSE:PINS) by $1 to $32 per share, stating in a note on Wednesday that the bull thesis on the stock remains on track.
Analysts there said the firm is updating its estimates for Pinterest following "another solid result" given challenging macro and end-market conditions.
"We think Pinterest is demonstrating its differentiation against entertainment-driven social media platforms. The company is making good progress toward its vision to become a shopping utility and meaningful opportunity for value creation connecting intent to action (aka users to merchants)," wrote the analysts.
The analysts pointed to engagement trends as a positive sign for Pinterest. They explained that following a pandemic boom-bust for user growth, engagement metrics have "become highly encouraging."
"While the headline metric MAU is growing again (up 4% in 4Q), mobile app users accelerated to 14% growth globally and 5% in UCAN. App users are the monetization driver at 80% of impressions. Engagement trends are also positive with sessions growing faster than app user and a new all-time high in weekly-to-monthly active users," they explained.
Loop Capital's revenue forecast for Pinterest is now "about 4% lower than previous with the same outlook for EBITDA margin to expand to 22% in 2024 (about 600bps above from 2022)."
Pinterest shares have climbed over 3% so far on Wednesday.