For the second trading day in a row, the stock of Pinterest (NYSE:PINS) was given a raised price target from Wall Street. But unlike Friday's increase, today's boost is having a positive effect on the stock, which was up 4.8% in 1 p.m. EST trading.
On Friday, the last trading day before the holiday break, Citigroup (NYSE:C) raised its price target on Pinterest, saying it was impressed with the company's fourth-quarter earnings results earlier in the month. But the price target Citi affixed to the stock, $85, was below the $87 Pinterest shares were trading for at the time, so investors took Citi's comments as a negative, and sold off the stock.
But today, we're hearing about Pinterest from analysts at Loop Capital, which is a whole lot more optimistic about the stock, reports TheFly.com. In today's note, Loop raises its price target on the internet image-pinning site to $105 a share, 25% above where Pinterest closed out last week.
Loop believes Pinterest is one of the best growth stocks in the digital media sector, and could exceed $150 billion in market capitalization within the next several years. As the analyst argues, Pinterest is showing business growth momentum superior to that of social media rival Facebook (NASDAQ:FB), and the numbers bear that out.
Data from S&P Global Market Intelligence shows that, over the past year, Pinterest grew its sales 48% -- twice as fast as Facebook. And S&P data similarly shows Pinterest outgrowing Facebook over the past two- and three-year periods.
Granted, Pinterest stock also trades for a sizable premium above Facebook (102 times trailing earnings versus just 24 times for Facebook), so maybe Pinterest's advantages are already priced into the stock. That seems to be Citigroup's thinking, but Loop clearly disagrees.