Baird lowers rating and price objective
Baird downgraded Pinterest Inc. (NYSE: PINS) from Outperform to Neutral on Friday and sharply cut its price target to $20.00 from $35.00. At the time of the research note the stock was trading around $18.54, only slightly above its 52-week low of $18.28, reflecting a decline of more than 52% over the prior 12 months.
Reasons cited by the research team
The firm pointed to sustained headwinds among larger advertisers and a recent period of corporate restructuring as the principal drivers of the change in stance. Together, those factors prompted what the bank described as "a near-term downshift in expectations" until the company can demonstrate a clearer path to stabilized growth and margin expansion, which Baird expects to occur through the second half of 2026.
Balance sheet and profitability picture
Despite the downgrade, the firm acknowledged several aspects of Pinterest’s financial position that remain constructive. Company-level data indicate Pinterest holds more cash than debt on its balance sheet, and its liquid assets exceed its short-term obligations. The business continues to report profitability, with recent financials showing an approximate 80% gross profit margin.
User trends versus monetization
Baird noted that user growth and engagement metrics for the platform remain positive. The research team identified monetization as the primary area where Pinterest is underperforming relative to expectations. That gap between an active user base and the platform’s ability to fully monetize that audience underpins the firm’s view that shares may remain range-bound until execution in advertising connection improves.
Outlook and valuation view
The research note retained a degree of longer-term optimism, observing that building a user base at Pinterest’s scale is more difficult than finding ways to link advertisers to a motivated audience. A Fair Value analysis included in the firm’s assessment suggests the shares are currently undervalued on that metric, but near-term performance will depend on improved advertiser conversion and margin recovery.
Recent earnings and analyst reaction
In its fourth-quarter 2025 results, Pinterest reported earnings per share of $0.67, narrowly missing the consensus $0.68 estimate. Revenue for the period was $1.319 billion, slightly under the $1.33 billion analysts had expected. The company’s results and the accompanying guidance did not trigger any immediate analyst upgrades or downgrades beyond the Baird action, and there were no announcements about mergers or acquisitions in the most recent disclosures.
What to watch next
For investors and market participants, the key variables to monitor are signs of renewed advertiser demand among larger accounts, evidence that the restructuring is translating into improved monetization, and margin trends heading into the second half of 2026. Until those elements show clearer improvement, Baird expects the stock to trade in a constrained range.