Pinterest stock price has remained in a tight range in the past few days as investors assess its growth trajectory. PINS ended the week at $34.22, a few points below this month’s high of $35.4 It is about 45% above its lowest level in April this year.
Pinterest growth continuing
Pinterest, a leading social media company, has been in a strong growth trajectory in the past few years. Its annual revenue has jumped from over $1.69 billion in 2020 to over $3.64 billion last year.
Pinterest’s monthly users have been rising, moving from 160 million in 2016 to over 570 million, making it one of the top players in the social media space.
Its business continued growing in the last quarter, albeit at a slower pace. Its revenue grew by 16% to over $855 million, with most of it coming from the United States and Canada.
The US and Canada bring most of its revenue even though they account for a small share of its monthly users. They have 102 monthly users, accounting for about 17% of the 570 monthly users.
Europe has become the fastest-growing market in terms of revenue. Its revenue grew by 24% in the first quarter to $147 million.
Most importantly, Pinterest’s EBITDA is growing. Its EBITDA jumped by 36% to $172 million, helped by its revenue growth and cost-cutting measures.
Double-digit growth to continue
The management and Wall Street analysts are optimistic that it will have double-digit growth for a while. In the recent results, the management estimated that the second-quarter revenue growth will be between $960 million and $980 million, while its adjusted EBITDA will be between $217 million and $237 million.
The average revenue estimate among Wall Street analysts is that its second-quarter revenue will be $973 million, a 14% annual increase. It will then cross the $1 billion metric next quarter.
Pinterest’s annual revenue will be $4.16 billion, followed by $4.74 billion in 2026, representing annual growth rates of over 14%. This revenue growth is much better than Meta Platforms.
Another potential catalyst for Pinterest stock is that it is relatively undervalued compared to other social media companies. It has a forward price-to-earnings ratio of 18, higher than the S&P 500’s 22.
Analysts see some more upside for the Pinterest stock. The average target among analysts is $40, up from $34.22. Some of the most bullish analysts are from JPMorgan and Wolf Research who have an overweight and outperform rating.
Read more: Top stocks forecasts ahead of earnings: Toast, Pinterest, Affirm, DraftKings
Pinterest stock price analysis
The daily chart shows that the PINS share price has rebounded in the past few months, moving from a low of $23.72 in April to a high of $35.4 this month.
Notably, the stock is about to form a golden cross pattern, which happens when the 50-day and 200-day moving averages are about to cross each other. This cross is one of the most bullish patterns in technical analysis, and is happening as it remains at the 50% Fibonacci Retracement level.
Therefore, the Pinterest stock price will likely have a bullish breakout, with the next point to watch being the psychological point at $40.
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