Analysts are becoming more optimistic about Pinterest ahead of the photo-sharing company’s quarterly results next week.
The company generates revenue on ads targeted at Pinterest’s users, who use the platform for inspiration on everything from kitchen organization to wedding dresses, so the slowdown in advertising that began last year spelled trouble for the stock. The shares fell 33% last year as investors waited to assess the performance of CEO Bill Ready, who took over in June 2022.
“We believe we can grow revenue faster than the overall market, with multiple ways to get there, resulting in a mid- to high-teens revenue CAGR over the next three to five years,” Chief Financial Officer Julia Brau Donnelly said on a Sept. 19 call with investors. Plus, “we think there is still plenty of room for growth outside the domestic market,” Kelley wrote. Last year, Pinterest expanded its ad offerings to Latin American markets like Argentina and Chile, but 40% to 45% of its user base is still in countries where the platform doesn’t contain ads, according to Sensor Tower data the analyst cited.