Why Pinterest Stock Roared Higher Today

Pinterest Stock

Pinterest Stock (NYSE:PINS)

The Pinterest stock surged today after an analyst assigned a buy rating to the company’s stock. Pinterest (NYSE:PINS) is a platform for sharing images online.

The news was quickly picked up by investors, who sent the shares of the social media company soaring 3.6% as of 10:48 a.m. Eastern Time.

What’s the Reason?

Eric Sheridan, an analyst at Goldman Sachs, awarded Pinterest stock an upgrade, moving it from a neutral recommendation to a buy rating. He increased his price objective for the company from $24 to $31.

Even though the online advertising business is “marred in uncertain times,” Sheridan is still optimistic about the Pinterest stock because it is “positively levered to a variety of long-term secular growth trends” (such as the increasing importance of online interaction and advertising, the rise of social commerce, the rise of the creator economy, and so on).

The analyst believes that Pinterest (NYSE:PINS) can capitalize on several opportunities that could increase the company’s average revenue per user. These opportunities include the company’s ability to increase its international monetization and the amount of advertising revenue generated by the “catalog pins” feature.

This upbeat outlook from Sheridan comes just a few days after an analyst at Piper Sandler named Thomas Champion increased the price objective for Pinterest’s stock to $23, up slightly from $22, while maintaining a neutral rating on the company’s stock.

What’s Next?

Even though the Pinterest stock price has decreased by 49% over the last year, Sheridan’s recent upgrading of the firm’s stock and investors’ reaction to it suggest that there is still a great deal of confidence around the business.

Long-term investors would be wise to look beyond the short-term instability and concentrate on Pinterest’s long-term potential rather than the general market’s propensity to continue experiencing volatility due to the Federal Reserve’s efforts to raise interest rates to bring sky-high inflation under control.

Featured Image-  Megapixl @ Koolander

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About the author: I'm a financial journalist with more than 3 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.