JP Morgan upgrades Pinterest on engagement gains, attractive valuation

Investing.com -- JP Morgan upgraded Pinterest Inc (NYSE: PINS) to Overweight from Neutral and raised its price target to $40 from $35, citing improved user engagement, monetization gains, and an undemanding valuation.

Pinterest has a growing user base, improving ad revenue, and expanding profit margins.

Despite a 10% year-to-date gain, PINS shares are still down 18% from February highs, presenting what JP Morgan sees as a favorable entry point.

JP Morgan noted that 85% of users access Pinterest via its mobile app, which also drives over 90% of the company’s revenue, reducing exposure to broader search platform volatility.

Analysts believe Pinterest’s full-funnel ad platform and AI tools like Performance+ are helping capture a larger share of ad budgets, especially from mid-sized advertisers.

The firm expects 14% revenue growth in both Q2 and full-year 2025, and sees room for further upside.

Pinterest is also nearing the low end of its targeted 30-34% adjusted EBITDA margin range, and JPMorgan believes faster top-line growth and cost control could drive multi-year margin expansion.

At 13x 2026 free cash flow and 12x 2026 adjusted EBITDA, the stock trades below historical averages, while stock-based compensation as a percentage of EBITDA is expected to decline.

The new $40 price target reflects a 15.5x multiple on 2026 estimated EBITDA of $1.54 billion.

JP Morgan sees solid execution and underappreciated fundamentals as reasons for a more bullish stance, calling Pinterest’s risk/reward “favorable.”

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