By Samrhitha A
(Reuters) -Shares of Pinterest (NYSE:PINS) surged 17% on Tuesday after a strong quarterly performance indicated that the image-sharing platform was riding a rebound in the advertising market and making inroads among the lucrative Gen Z.
Monthly active user growth surpassed the pandemic surge to hit a record high of 482 million, with the company saying that a lot of that was driven by the younger Gen Z population, seen as a top target for mobile advertisers.
"Take the strong engagement trends as a sign that Pinterest may have found product-market fit with younger users which keeps the flywheel going," Bernstein analyst Mark Shmulik said.
Wall Street lauded the results. At least 19 analysts raised their price targets on the stock, boosting the median to $35, per LSEG data.
Shares were up 17% at $29.43, and the company was on track to add nearly $3 billion in market value if the gains held.
Pinterest's comments on an improving advertising market are the latest after Meta (NASDAQ:META), Google (NASDAQ:GOOGL) and Snap last week pointed to the recovery following the pandemic-induced slowdown and later warnings of a recession.
Like its larger peers, retail was an area of strength for Pinterest.
Meanwhile, the company said more than half its users were viewing the platform, which helps create online pinboards, as a place to shop and the company has focused on making it more "shoppable" to help drive engagement.
"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," Schmulik said.