By Adam Levine

Wall Street analysts are expecting a milestone when Pinterest reports its third-quarter earnings on Tuesday afternoon. It may be the first non-holiday quarter in which revenue exceeded a billion dollars.

Even so, investors may be undervaluing this relatively small player in social media.

The consensus estimate is that sales will be $1.05 billion, up 17% from last year, at the high end of the range of forecasts Pinterest issued three months ago. Analysts expect adjusted earnings per share of 42 cents, up from 40 cents in 2024.

Pinterest's sales regularly exceed expectations, but that hasn't guaranteed that the stock will rally the next day. In the past 21 quarters, revenue fell short of projections only twice, but the stock fell on nine occasions.

Swings in the stock are also outsized. After those 21 quarters, the average move, up or down, has been 14%, ranging from a gain of 36% to a loss of 18%. Investors should expect volatility after the report.

Pinterest's valuation reflects that the stock is a bit ignored by investors. The stock trades at 16.6 times the earnings per share expected for the next 12 months, compared with 23.1 times for the S&P 500 index.

Pinterest's P/E ratio is roughly equal to the percentage growth in earnings expected for the coming year, which makes the shares relatively inexpensive. Earnings growth for the S&P 500 is expected to be 14%, well below the index's P/E ratio.

The analysts who cover Pinterest see that upside potential. The average rating on the stock is Buy, and the average price target is $43.40, implying a 29% rise over Monday's closing price of $33.70. Of the 34 analysts who have written recent notes on Pinterest, only one has a Sell rating.

Pinterest stock is up 16% this year, about the same as the S&P 500.

Write to Adam Levine at adam.levine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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November 04, 2025 11:33 ET (16:33 GMT)

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