Loop Capital on Friday moved Pinterest Inc (PINS) from a Buy rating to Hold and slashed its price target to $18.00 from $45.00 after the social-media service reported quarterly results that fell short of expectations. Pinterest's shares were trading at $18.54, down more than 52% versus a year earlier and sitting just above the 52-week low of $18.28.
The research firm said the downgrade reflected several near-term operational and market challenges. Loop Capital pointed to an earnings miss, weaker guidance for the period ahead and a plan for higher spending as the principal justifications for the change in stance. While the firm noted Pinterest's "unique use case, commercial relevance and strong user growth," it added that those strengths were "overshadowed by struggles to monetize and outsized exposure to unusual macro conditions."
Loop Capital estimated that Pinterest will require "several quarters at least" to work through a sales reorganization, to adapt to elevated spending levels and to restore investor confidence in the business. At the same time, the firm said that the recent stock price drop "significantly understates the intrinsic value" of Pinterest's commercial engagement capabilities.
Data from InvestingPro referenced in the firm's analysis indicates Pinterest retains a "GREAT" overall financial health score and is trading at a P/E ratio of 6.49, figures that the research note highlighted as context for the longer-term opportunity despite current performance shortfalls.
The downgrade from Loop Capital followed Pinterest's quarterly report, which included results below market expectations, a reduction in forward guidance and an increase in projected spending. Those developments prompted a wave of reassessments from other major financial firms.
Among recent analyst moves, BofA Securities lowered its rating to Neutral and cut its price target to $19.00, citing competition concerns and unmet engagement-improvement expectations. JPMorgan also downgraded Pinterest to Neutral, pointing to revenue headwinds and what it characterized as disappointing first-quarter revenue growth guidance that signaled a slowdown. Evercore ISI moved its rating to In Line after describing Pinterest's fourth-quarter earnings as a "Miss & Lower."
UBS kept a Buy rating on Pinterest but reduced its price target to $26.00, reflecting a weaker outlook and prompting downward revisions to future revenue and EBITDA forecasts. Baird downgraded the stock to Neutral amid advertiser headwinds and a restructuring effort, setting a $20.00 price target.
These analyst actions collectively reflect heightened caution toward Pinterest's near-term growth trajectory and profitability as firms reassess the company's ability to translate user engagement into consistent advertising revenue amid shifting market conditions.
What to watch next: Execution of the sales reorganization, management of elevated spending, and whether future quarters show signs of reaccelerating revenue or improved monetization.