The struggling social media stock could see more downgrades in the future
Pinterest Inc (NYSE:PINS) stock is down 3.6% to trade at $29.55 at last check, after a downgrade from Jefferies to "hold" from "buy," as well as a price-target cut to $32 from $40. The firm noted the social media platform's new products are unlikely to drive previously implied expected revenue growth, and that the pace of margin expansion may slow after cost optimization efforts. Wells Fargo also lowered its price objective to $39 from $40.
PINS is now on track for a fourth-straight loss and biggest single-day percentage drop since Nov. 8, after running into a familiar ceiling at $32 last week that also rejected its early December rally. The equity shed more than 20% over the past 12 months, but a long-term floor at the $28 level looks ready to contain additional losses.
Analysts were overwhelmingly bullish coming into today, with 23 of 32 in coverage calling the equity a "buy" or better. Meanwhile, the 12-month consensus target price of $38.76 is a 31.5% premium to current levels. Considering PINS' 12-month deficit, there is plenty of room for additional downgrades and/or price-target cuts.
Puts have been more popular than usual in the options pits. PINS' 50-day call/put volume ratio of 1.27 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 98% of readings from the past year.