Goldman Sachs Lowers Pinterest Target, RBC Downgrades Stock Amid Growth Concerns

Pinterest (PINS) is under pressure after two major financial institutions revised their outlooks on the stock within a single day. Goldman Sachs reduced its price target on PINS to $28 from $35, reflecting cautious sentiment toward the company's ability to sustain revenue growth in a competitive digital advertising landscape. Concurrently, RBC Capital Markets downgraded the stock to 'underperform' from 'sector perform,' citing concerns over slower user engagement and limited progress in ad monetization efficiency. The moves come as Pinterest reported fourth-quarter revenue of $814 million, a 7% year-over-year increase, but missed analyst expectations by $15 million. Adjusted EBITDA margins contracted to 36%, down from 40% in the same quarter last year, highlighting rising operational costs despite modest top-line gains. The company’s active user base grew 5% YoY to 510 million, but the average revenue per user declined for the third consecutive quarter, falling to $1.60 from $1.68. Market reaction has been immediate. PINS dropped 7.3% in early after-hours trading, erasing gains from a previous earnings rally. Investors are now pricing in heightened risks, particularly around Pinterest’s ability to compete with Meta and Alphabet in the digital ad space. The stock’s forward P/E ratio now stands at 22, above the technology sector average, raising concerns about valuation sustainability. The dual downgrade underscores a broader shift in analyst sentiment, with institutional investors reassessing the long-term viability of social media platforms reliant on ad-driven models. As competition intensifies and user attention becomes harder to capture, the pressure on Pinterest to deliver scalable growth and margin improvement will intensify.