Pinterest Inc PINS Shares are up Tuesday, and if Piper Sandler is right about the ideation platform, the stock should continue to see more buyers than sellers through 2023.
What you should know: Piper Sandler expects Pinterest stock to outperform as the social media stock rolls into 2023, guided by multiple tailwinds.
“The lows are probably already in,” analysts at Piper Sandler wrote in a new note to clients.
After a survey of ad buyers and a series of reviews that indicate better user trends, Piper Sandler upgraded Pinterest to Overweight.
Advertising survey: Piper Sandler’s 2023 Ad Buyer Survey showed Pinterest participating in the social space.
Meta Platforms Inc META Facebook maintained its position as the leader in social advertising, but the survey showed it wasn’t gaining market share. In addition, Meta’s Instagram lost advertising share, falling from 23% to 21%. Twitter is the only other social platform showing declining advertising market share.
On the other hand Pinterest, snap inc SNAP and TikTok all won shares. Pinterest’s advertising share increased from 5% to 8% year over year.
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“Twitter is the group’s largest stock contributor, and it’s possible that PINS’ brand-safe platform will provide a desirable alternative for spend exiting Twitter,” said Piper Sandler.
User trends: User growth has trended sideways from Q2 2021 to Q2 2022, but trends turned positive again in the most recent quarter, Piper Sandler said, adding that Ads Manager data suggests recent user trends are continuing.
Pinterest is seeing significant growth internationally, as well as strong growth of its mobile app in the US
“PINS provides access to a higher-income demographic with commercial intent. Also, we’re now seeing entry into younger cohorts, which today make up a smaller portion of the base,” said Piper Sandler.
Piper Sandler also sees a handful of other tailwinds ahead, including improved margins in 2023, a share buyback, and revisions to estimates.
“We expect FY23 revenue and EBITDA to be 2% higher to reflect strong survey results. Based on our new estimates, our DCF-based target moves from $25 to $30,” said Piper Sandler.
PINS Price Promotion: Pinterest has a 52-week high of $38.63 and a 52-week low of $16.14.
The shares are up 12.4% to $26.54 as of Tuesday afternoon, according to Benzinga Pro.
Photo: Hassas Arts from Pixabay.
