Pinterest shares soared 17% in premarket trading on Tuesday, Oct 31, in a stunning Halloween treat for investors.
Reuters reports that this surge comes hot on the heels of an impressive quarterly performance that suggests Pinterest is making waves in the advertising world and, notably, attracting the attention of Generation Z.
Record-Breaking User Growth
Monthly active users for Pinterest have surpassed the pandemic-driven highs, reaching a record 482 million - an impressive 8% increase. What's truly striking is that the younger Gen Z demographic, a prized target for mobile advertisers, has fueled a significant portion of this growth.
Analysts have taken note of this surge, with Bernstein analyst Mark Shmulik stating, "Take the strong engagement trends as a sign that Pinterest may have found product-market fit with younger users, which keeps the flywheel going."
Wall Street's Reaction
Wall Street has greeted these results with open arms. In fact, 19 analysts raised their price targets on Pinterest stock, pushing the median target to $35, as per data from the London Stock Exchange Group (LSEG).
Reuters tells us that shares of Pinterest jumped by 17% to $29.43, and the company was poised to add almost $3 billion in market value if this momentum held.
Pinterest's comments on an improving advertising market echo similar sentiments from industry giants like Meta, Google, and Snap, who recently reported a recovery following the pandemic-induced slowdown.
A Retail Resurgence
Like its larger counterparts, Pinterest has witnessed strength in the retail sector. The company shared that over half of its users view the platform, known for creating online pinboards, as a shopping destination. As a strategic move to further engage users, Pinterest has focused on enhancing its "shoppability."
Mark Shmulik expressed his optimism, saying, "If the company can convert that intent to revenues over the next few years, then we can see a pathway to further revenue acceleration beyond our base case and closing the gap to more intentional, shopping-heavy peers."
The Power of Advertising
A key driver behind Pinterest's stellar performance has been the revival of advertising revenue. Over the past year, many tech platforms grappled with softer ad revenues due to surging inflation and economic uncertainty.
These factors caused advertisers to curtail their marketing budgets, negatively impacting ad revenue for many tech companies.
However, Pinterest's results highlight a significant trend - advertisers are returning to the platform. Notably, this trend is not unique to Pinterest, as Facebook parent Meta and Snapchat parent Snap have also reported recovering ad revenue.
This suggests an industry-wide rebound, showcasing renewed confidence in advertising.
In Other News
A team of researchers from the University of Washington released A11yBoard for Google Slides, a new browser extension and mobile application designed to improve accessibility for blind users during presentations.
This tool aims to help visually impaired users navigate complex slide layouts, objects, images, and text.
Stay posted here at Tech Times.
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