Guggenheim has reduced its price target for Pinterest Inc (NYSE:PINS) to $25.00 from $38.00, while continuing to carry a Buy rating in the wake of Pinterest's fourth-quarter results. The new target aligns with InvestingPro analysis that indicates the company is trading below intrinsic value, with the stock quoted at $14.61 - down 63% from its 52-week high of $39.93.
The brokerage cited fourth-quarter revenue and Adjusted EBITDA that came in under expectations. Company management attributed the shortfall primarily to tariff-related headwinds and to the company carrying a higher mix of large retail advertisers compared with peers. Despite the top-line and EBITDA misses, Pinterest reported an Adjusted EBITDA of $305.51 million and sustained gross profit margins near 80%, underscoring continued operational leverage in the business.
First-quarter guidance also landed below Street estimates, with management warning that the tariff impact is expected to continue into the new year. To counter these pressures and reaccelerate revenue growth toward its historical mid-to-high teens rates, Pinterest emphasized a set of initiatives designed to broaden its revenue mix - notably by expanding engagement with small- and medium-sized business advertisers and mid-market enterprises.
InvestingPro metrics show that Pinterest's revenue increased 16.79% over the last twelve months, and consensus analyst forecasts call for approximately 16% revenue growth in fiscal year 2025. Management's 2026 outlook points to flat margin expansion in the near term, as the company plans investments in artificial intelligence capabilities and a sales transformation effort that are expected to weigh on margin improvement.
Despite that near-term pressure, Pinterest reaffirmed a medium-term target of achieving 30-34% Adjusted EBITDA margins. Management also warned that the pending acquisition of TV Scientific, expected to close in the first half of 2026, will likely create roughly a 100 basis point drag on full-year margins in the year it completes.
Balance-sheet metrics provide the company flexibility to pursue these strategic investments. Pinterest reported having more cash than debt and a current ratio of 8.36, a liquidity position the company says will support AI investments and the planned sales organization changes. User engagement offered a positive datapoint in the quarter, as Pinterest logged a record number of Monthly Active Users in the fourth quarter.
Guggenheim framed the reacceleration of top-line growth as an execution issue, expressing confidence that the impact of Pinterest's recently appointed Chief Business Officer should begin to materialize over the coming quarters. InvestingPro also highlights that Pinterest was profitable over the trailing twelve months, with a price-to-earnings ratio of 5.12, a value metric Guggenheim and other observers note as indicating potential upside if management can deliver on its growth plans.
The Q4 report prompted a wave of analyst revisions and lowered price targets across several brokerages. Piper Sandler cut its target to $21 from $33, citing disappointing quarterly results and first-quarter guidance. Cantor Fitzgerald trimmed its target to $18 from $34, noting fourth-quarter revenues and EBITDA missed Street estimates by 1% and 2%, respectively. RBC Capital downgraded the stock from Outperform to Sector Perform and set a new target of $17, down from $38, citing disappointing results and tariff issues. Loop Capital moved from Buy to Hold and reduced its target to $18 from $45, pointing to monetization challenges and higher spending.
Those adjustments reflect a broader analyst concern about Pinterest's near-term revenue trajectory and its ability to monetize growth while absorbing tariff-related and other cost pressures. Investors will likely watch upcoming quarters for signs that Pinterest's initiatives to diversify advertiser mix and invest in sales capabilities are translating into sustained top-line improvement.
Note: The analysis above is based on the company-reported figures, management commentary, and subsequent analyst actions as presented in the fourth-quarter report and related guidance.