Pinterest Inc. (PINS) shares have risen after Facebook (FB) last week announced the removal of its image-sharing competitor, Hobbi app.
Hobbi was part of Facebook’s push to create a viable competitor to Pinterest’s popular image-sharing and social media designer site. However, it was widely panned in user-reviews for emulating Pinterest too closely and ultimately failed to gain traction amongst customers.
Pinterest’s stock was up 3.6% at $24.11 as of market close on Thursday while Facebook’s stock was down 1.7% at $233.42 per share.
Deutsche Bank analyst Lloyd Walmsley raised the price target from $20 to $27 (12% upside potential) on July 1 and reiterated a Buy rating on the stock. He stated optimistically, “Pinterest continues to invest heavily in ad tech and remains at the point in its life cycle where ad product can unlock the needle-moving ad budget.” The analyst sees room for the company to benefit from enhanced abilities for users to shop through the platform and to benefit from “multiple advertising product cycles”.
In May, Pinterest announced a partnership with the e-commerce platform Shopify (SHOP). The move adds the option to integrate a Pinterest app onto the Shopify site so that it will give “more than one million merchants” a way to make their products more accessible to customers using Pinterest. According to the company, shopping through its site has “increased 44% year-over-year, and total traffic to retailers has increased by 2.3x year-over-year. And, due in part to early beta testing with Shopify, catalog feed uploads increased 144% in the first quarter of the year.”
Pinterest stock is up 29% year-to-date with 7 analysts assigning Buy ratings, 10 have Hold ratings, and 1 Sell rating which altogether results in a consensus of Moderate Buy. The average analyst price target stands at $23.36 (3.1% downside potential). (See Pinterest’s stock analysis on TipRanks).
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