Pinterest (PINS) is gaining investor confidence following solid performance in recent quarters and encouraging monetization efforts, Wedbush Securities said in a report Thursday.
"We believe the impact of newer initiatives on monetization and engagement are not fully understood, and consensus estimates still reflect some level of conservatism," the firm said.
Wedbush's Q2 Digital Advertising survey suggested expectations for the quarter are achievable, with advertiser intent for H2 turning incrementally positive.
Near-term revenue growth is expected to benefit from stronger contributions from new monetization initiatives, easier year-over-year comparisons, and a rebound from last year's weakness in consumer packaged goods ad spending.
Ahead of Q2 results, Wedbush raised its estimates, now projecting global monthly active users of 574 million, up 10% from a year earlier, and total revenue of $978 million, up 14.6%. Adjusted earnings before interest, taxes, depreciation, and amortization is forecast at $235 million, slightly above consensus.
Non-GAAP earnings per share is expected to rise 53.1% year over year to $0.37, according to the note.
For the full year, the firm kept its revenue growth forecast unchanged at 15.1% but raised its adjusted EBITDA estimate to $1.3 billion, representing a 30.7% margin, and its non-GAAP EPS forecast to $1.89, up 46.2%.
Wedbush raised its 12-month price target on Pinterest to $42 from $40 and maintained an outperform rating.
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