PINS: After IPO Frenzy, Analysts Have Somber Expectations


Jun. 10 2019, Updated 8:16 a.m. ET

IPO frenzy

Pinterest (PINS) was listed as a publicly-traded company in April. Pinterest priced its IPO at $19 per share—above its original price range of $15–$17. Pinterest shares rose during the debut. The shares started trading at $23.75, which was ~25% above the company’s IPO price. On the same day, Zoom Video Communications (ZM) was listed and saw massive gains.

Since the initial IPO frenzy, analysts have somber expectations for Pinterest. The stock has received a mean consensus target price of $28, which represents a potential upside of 1.4% above last week’s closing prices. Two analysts recommended a “strong buy,” two recommended a “buy,” 13 recommended a “hold,” and one recommended a “sell” or equivalent rating.

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Analysts expect Pinterest to post revenues of $1.1 billion this year and $1.4 billion next year. The company is expected to post a negative EBITDA of $54 million this year. However, Pinterest’s EBITDA is expected to rise to $47 million next year and $176 million in 2021. Pinterest is valued at an EV-to-revenue multiple of 16x its 2019 expected revenues and 12.2x its 2020 consensus revenues. The PE ratio is 1,297x based on the 2020 estimates. However, Pinterest’s PE ratio based on the consensus 2021 earnings is 97x.

We have seen a wave of tech IPOs this year. While Uber (UBER) and Lyft (LYFT) had disappointing price action, Zoom Video Communications and Pinterest have seen strong gains. Currently, Uber and Lyft are trading below their IPO price.


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