Pinterest's (PINS) Q1 results and Q2 guidance were better than feared, supported by strong execution in ad products and AI initiatives, Oppenheimer said in a research note Friday.
While Pinterest has exposure to challenged verticals such as furniture, consumer packaged goods, and broader retail, the company is navigating headwinds effectively.
The firm said Pinterest management is seeing some pullback from Asia-based sellers in the US, but noted that those advertisers are ramping up spending in Europe and the rest of the world. Trends remain healthy in both the first quarter and early second-quarter signals, Oppenheimer added.
New advertising products and AI-driven tools are helping deliver stronger returns for advertisers, according to the firm. Pinterest's AI-powered Performance+ offering is reportedly outperforming traditional campaigns in the majority of A/B tests, while its visual search model now outperforms off-the-shelf alternatives in identifying relevant content.
Pinterest reported Q1 revenue of $855 million, up 16% year over year and about 1% above both Oppenheimer and Street estimates. Ad impressions rose 49% year over year, up from 43% in Q4, while pricing declined 22% amid a continued international mix shift.
The company guided Q2 revenue to $960 million-$980 million, about 1% above Oppenheimer's estimate and in line with consensus.
Oppenheimer raised its price target on Pinterest to $40 from $36 and reiterated its outperform rating.
Pinterest's shares were rising past 8% in recent trading.
Price: 30.15, Change: +2.29, Percent Change: +8.22
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