4 big analyst picks: Pinterest poised for 'high double-digit EBITDA growth'
Investing.com | Author Davit Kirakosyan
Published Jul 18, 2023 05:01AM ET
Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Pinterest, Chewy, and Yelp, and initiation at Blade Air Mobility.
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Pinterest earns an upgrade at Evercore ISI, shares gain/h2
Pinterest (NYSE:PINS) shares gained more than 3% pre-market today after Evercore ISI upgraded the company to Outperform from In Line and raised its price target to $41.00 from $30.00.
The rating change was based on several factors:
1. Clear evidence of Digital Ad spend stabilizing, moving away from trough levels of late '22, and showing tentative evidence of an H2 recovery.
2. Operational improvements implemented by new CEO Bill Ready, leading to positive outcomes for both users and advertisers.
3. Combination of the first two reasons creating a fundamental inflection point, with the expectation of significant revenue growth acceleration, substantial margin expansion, and high double-digit EBITDA growth (e.g., 50%+ Y/Y in Q4) over the next 2-4 quarters. This growth potential is likely to result in a re-rating of PINS shares.
4. Current valuation (27X '24 EV/EBITDA & 21X '25 EV/EBITDA) considered reasonable for a company with the potential to sustain 30%+ EBITDA growth and a track record of consistent free cash flow (FCF) generation. The company is also expected to deliver 20%+ FCF margins by 2025.
The company is set to report its Q2/23 earnings on July 27. Street estimates stand at $0.12 for EPS and $695.71 million for revenues.
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