By Sam Boughedda
Investing.com — The share price of social media company Pinterest Inc (NYSE:PINS) has tumbled over 10% Tuesday after Guggenheim said they are downgrading the stock to neutral from buy, lowering their price target to $39 from $46.
Analyst Michael Morris told investors in a research note that the downgrade was because of concerns over user growth based on data from Ads Manager and Apptopia download trends.
The analyst believes the company's aggregate users came in at 218.1 million in December, down from 226.9 million in November. Morris also said the platform lost 24 million users in the second quarter and a further 10 million in the third quarter.
Guggenheim's rating is similar to Wolfe Research. Wolfe started Pinterest with a peer perform rating. However, analyst Deepak Mathivanan told investors the company has significant monetization upside over the long term.
"We are currently on the sidelines on PINS. We like the ongoing product transition at the company, which should not only improve the content and engagement on the platform but also provide PINS significant monetization upside long-term. However, the near-term uncertainties on its revenue and MAU growth trajectory are likely to keep multiples under pressure," said Mathivanan.