Pinterest ( NYSE: PINS ) shares rose on Thursday as Goldman Sachs upgraded the social network, pointing out that the risk-reward has a more "more positive" skew at current levels.
Analyst Eric Sheridan boosted his rating on Pinterest ( PINS ) to buy from neutral and raised the price target to $31 from $24, noting that the company has seen improved user growth and engagement trends in the short and medium-terms, with the potential for revenue and operating margin upside in 2023 and 2024.
"Our recent work has given us increased confidence in Pinterest's ability to grow monetization and capture a greater share of ad budgets as management executes against its shopping/commerce opportunity and, over the long-term, we see Pinterest as positively levered to a number of long-term secular growth themes (engagement & ad spend shifting online, social commerce, creator economy, etc.)," Sheridan wrote in a note to clients.
Pinterest ( PINS ) rose nearly 5% in premarket trading to $25.85.
Sheridan added that the current advertising landscape is "volatile," at least over the next few quarters, and may hamper the company's management efforts in evolving the platform but the longer-term possibilities are still there.
Last month, investment firm Wolfe Research upgraded Pinterest ( PINS ), noting it has a "significant runway" for both user growth and revenue over the long term .
Analysts are largely bullish on Pinterest ( PINS ). It has a BUY rating from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates PINS a HOLD .
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Pinterest pops as Goldman Sachs upgrades, citing 'more positive risk-reward skew'