Pinterest Inc (NYSE:PINS) has been downgraded by Wedbush analysts to a ‘Neutral’ rating from ‘Outperform,’ with the firm citing emerging risks from AI and mixed financial results.
The analysts also lowered their 12-month price target to $30 from $34. Shares traded at about $27 on Monday.
Wedbush highlighted concerns that AI-driven ad buying favors platforms with rich first-party purchase data and closed-loop conversion measurement, an area where Pinterest remains at a disadvantage.
“Pinterest has improved its ability to collect and measure intent signals, but still lacks full commerce visibility relative to key peers, limiting the effectiveness of its ad platform,” the analysts wrote.
They noted that advertisers are reallocating budgets to platforms where AI can more effectively drive sales, warning that “as AI compresses the market of discovery and purchase on competing platforms, the value proposition of subscale players, such as Pinterest, erodes.”
In a bear-case scenario, Wedbush outlined a potential price target of $20 per share.
The firm also highlighted Pinterest’s mixed third-quarter results. The company forecasted revenue growth roughly 100 basis points below prior expectations for the next quarter.
“Importantly, the guide contemplates a less constructive range of outcomes for the platform given broader macro uncertainty and tariff implications,” the analysts wrote.
Wedbush noted that any tailwinds from easing year-over-year comparisons and the lapping of consumer packaged goods (CPG) weakness were more than offset by these challenges, and investor sentiment has remained muted, with shares trading at about 10 times Wedbush’s 2027 adjusted EBITDA estimate.
Wedbush believes that while Pinterest remains on track to achieve the lower end of its intermediate-term targets, visibility into catalysts that could meaningfully reaccelerate growth is limited.
“We see limited visibility into catalysts that could meaningfully reaccelerate growth, and we are revising lower our longer-term expectations to more accurately reflect this view,” they concluded.