TLDR
- Pinterest reported strong Q1 results with revenue up 16% to $855 million and adjusted EPS up 35% to $0.23
- CEO Bill Ready’s transformation strategy focuses on making the platform shoppable and leveraging AI for better user experience
- Monthly active users increased 11% to 570 million, with international markets showing strongest growth
- Wolfe analyst Shweta Khajuria upgraded PINS to Buy with a $40 price target (24% upside)
- Performance+ advertising suite is driving revenue acceleration with estimated 2-3 percentage point growth lift
Pinterest’s recent quarter showed impressive results across all key metrics. The company reported revenue of $855 million, representing a 16% year-over-year increase that surpassed analyst expectations of $847 million.
This growth was driven by improvements in both user numbers and monetization. Monthly active users climbed 11% to reach 570 million globally.
The company’s strategy under CEO Bill Ready appears to be bearing fruit. Since taking the helm nearly three years ago, Ready has focused on transforming Pinterest into a more shoppable platform.
Pinterest has been investing heavily in artificial intelligence to enhance the user experience. Their multimodal AI model, trained on both image and text data, aims to better interpret user input and provide more personalized recommendations.
These improvements have led to greater user engagement and more effective ad placements. The company’s average revenue per user increased 5% year-over-year to $1.52.
Regional Performance Shows Promise
The strongest user growth came from international markets. “Rest of world” users increased 14% to 320 million, while U.S. and Canada users grew 4% to 102 million, and European users increased 5% to 148 million.
Revenue growth followed a similar pattern. U.S. and Canada revenue increased 12% to $663 million, European revenue climbed 24% to $147 million, and “rest of world” revenue surged 49% to $45 million.
The company has been successfully exporting its shopping playbook to markets outside North America. International monetization represents a major growth opportunity for Pinterest.
On the profitability front, Pinterest saw its adjusted EBITDA jump 36% year-over-year to $172 million. Adjusted earnings per share rose by 35% to $0.23.
For Q2, Pinterest forecasts revenue between $960 million and $980 million, representing 12% to 15% growth. This guidance exceeded analyst expectations of $966 million.
Analyst Upgrade Reflects Growing Confidence
Wolfe analyst Shweta Khajuria recently upgraded Pinterest stock to Buy from Hold, maintaining a $40 price target. This implies more than 24% upside from current levels.
Khajuria cited a “more muted” macroeconomic overhang, helped by developments like the U.S.-China trade agreement. The recent strong quarterly results serve as “proof points” of improving fundamentals.
A key driver behind the analyst’s optimism is Pinterest’s Performance+ advertising suite. This tool is becoming central to revenue acceleration, with estimates suggesting it contributes 2-3 percentage points of growth lift.
Field tests revealed a 27.7% boost in impressions and 22.5% lower cost-per-clicks compared to campaigns not using the tool. This improved efficiency is helping Pinterest gain share in the digital advertising market.
Pinterest’s growing third-party ad business, including its partnership with Amazon, represents another long-term catalyst that could unlock further monetization potential.
Despite the stock’s recent rally following earnings, shares still trade at a forward P/E ratio of about 18 based on 2025 analyst estimates. This represents a discount to advertising peers like Snap and The Trade Desk.
Pinterest shares have gained 12% year-to-date, outperforming Snap (down 20%) and The Trade Desk (down 34%). However, the stock remains down about 21% over the past 12 months.
Wall Street overall is bullish on Pinterest stock, with a Strong Buy consensus rating based on 25 Buys and seven Hold recommendations. The average price target stands at $39.83, suggesting 23.54% upside potential.
The company continues to face some challenges, noting that tariffs have impacted spending from Asia-based e-commerce retailers in the U.S. However, these advertisers have shifted spending to Europe and other regions in response.
Pinterest stock has shown rally-like behavior before, only for gains to eventually fade. The question for investors is whether this latest surge has more staying power given the company’s improving fundamentals.
