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StockBeat: Pinterest Climbs on Hopes 'Unique' Platform Will Spur Growth

Investing.com - Pinterest climbed Tuesday as investors continued to digest a note from Wedbush Securities hailing the company's "unique" social media platform that puts its on course to top $1 billion in revenue this year.

Wedbush on Monday initiated coverage on Pinterest with an outperform rating and $33 price target and claimed the company's platform is "unique to any other media platform as advertising actually improves the consumer experience."

Pinterest (NYSE:PINS) rallied to a session high of $29.79, but pared some gains to trade at $28.58, up 2.51% at 12:42 PM ET.

Pinterest's "fundamentally different" platform makes it stand out from rivals as "Pinterest users, or 'Pinners,' often come to the site for discovery and idea generation and are often in various stages of the commercial intent funnel," Wedbush analysts Ygal Arounian and Amir Chaudhri said.

Despite stiff competition for advertising dollars from the likes of Facebook, Google, Amazon and Alibaba, which together account for about 65% of all global digital ad dollars spent, Pinterest is on track to top $1 billion in revenue this year, the analysts said.

Wedbush estimates revenue will rise 43% this year to $1.1 billion and 37% to $1.5 billion in 2020.

Pinterest, similar to some of its recent IPO peers, remains a loss-making entity, but Wedbush sees the social media company "roughly break-even" next year and generating earnings before interest, tax, depreciation and amortization (EBITDA) to $260 million in 2021.

"Many key initiatives like its self-serve ad platform, international localization, shopping and its catalogues product aren't expected to have meaningful impact until 2020," Arounian and Chaudhri said.

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