RBC Capital moved Pinterest Inc (PINS) down the coverage list, lowering its rating from Outperform to Sector Perform and cutting the price target sharply to $17 from $38. The shares trade around $18.54, close to a 52-week low of $18.28, and have declined by more than 52% over the last year, according to InvestingPro data.
Brad Erickson, the RBC analyst leading the call, pointed to a disappointing fourth-quarter showing as the proximate trigger for the change. While tariffs were identified as an immediate headwind to the quarter, Erickson framed the results as symptomatic of what he described as "a more consistent pattern of adverse concentration." That assessment sits alongside an acknowledgement that Pinterest’s balance sheet and liquidity metrics remain strong: InvestingPro data assigns the company a "GREAT" overall financial health score and shows a Current Ratio of 8.36.
RBC said its earlier constructive thesis hinged on a product cycle that would drive improved conversion and better pricing power. That thesis has not unfolded despite a string of platform enhancements. The company has rolled out features such as mobile deep linking, direct links, expanded retail media partnerships, and Performance Plus, yet RBC says these upgrades have not translated into the anticipated conversion gains.
In its review, RBC argued the roadmap currently "lacks a 'what's next'" and that opportunities to broaden adoption among small and medium-sized businesses appear limited. The bank underscored that without fresh drivers for user engagement or content growth, structural enhancements to conversion rates and pricing will likely remain muted. It left open the possibility that meaningful improvements could arrive from "step function improvements to targeting & conversion from AI improvements," but identified that as potential upside rather than a present reality.
RBC’s downgrade is not isolated. Following the company’s quarter, several other firms trimmed opinions and targets. Loop Capital moved Pinterest from Buy to Hold and cut its target to $18 from $45, citing monetization struggles and rising spending. BofA Securities downgraded the stock to Neutral and lowered its price target to $19 from $39, flagging competition and shortfalls in engagement. JPMorgan also shifted to Neutral and reduced its target to $20 from $36 after Pinterest’s guidance indicated a revenue growth slowdown. Evercore ISI set an In Line rating with a $25 target, citing decelerating growth and a fourth-quarter performance characterized as a "Miss & Lower."
Together, these revisions reflect a consensus that Pinterest is encountering obstacles in turning product improvements into durable revenue expansion. The questions raised by multiple sell-side firms center on the platform’s ability to strengthen monetization amid competitive pressures and to demonstrate that recent investments will produce measurable conversion and pricing uplift.
Summary - RBC Capital downgraded Pinterest to Sector Perform and cut its price target to $17 from $38 after a weak fourth quarter and stalled product-cycle gains. Multiple other brokerages have also lowered ratings and targets, highlighting monetization and growth challenges despite solid liquidity metrics.
Key points
- RBC reduced rating to Sector Perform and price target to $17 from $38; stock trading near its 52-week low at $18.54 and down over 52% in the past year.
- Product upgrades including mobile deep linking, direct links, expanded retail media partnerships, and Performance Plus have not produced the expected conversion improvements.
- Several peers - Loop Capital, BofA Securities, JPMorgan, and Evercore ISI - also downgraded or lowered targets following the company’s fourth-quarter results.
Risks and uncertainties
- Absent new drivers of user engagement or content growth, structural gains in conversion and pricing may remain limited - impacting digital advertising and retail media sectors.
- Tariff effects and concentrated revenue exposures cited by RBC add uncertainty to near-term earnings - relevant to investors in technology and ad-supported platforms.
- Competitive pressures and the potential need for increased spending to stimulate growth could compress margins and delay profitability improvements.