What happened

During a tough month for the stock market in September, Pinterest (PINS -1.53%) stock not only managed to beat the market, but it even posted a positive return.

Last month, stocks fell sharply over concerns about rising interest rates and the prospect of a recession, but the social media company bucked the headwinds in growth stocks and gained 1% for the month, according to data from S&P Global Market Intelligence. The company benefited from positive analyst chatter as well as reports that activist investor Elliott Investment Management may be pushing for a sale of the company.

As the following chart shows, Pinterest stock was erratic during the month, but it managed to avoid the S&P 500's steady decline.

PINS Chart

PINS data by YCharts

So what

Pinterest first started gaining on Sept. 7, rising 6.2% when it got a bullish analyst note from Wolfe Research. Analyst Deepak Mathivanan upgraded the stock from "peer perform" to "market perform," saying the company has a significant opportunity in both user growth and monetization over the long term. Mathivanan also expressed confidence in new CEO Bill Ready, and said the company has a number of positive catalysts ahead including month-to-month user growth, margin expansion, and new products. He gave Pinterest a price target of $28.  

Rumors about Alphabet's potential interest in an acquisition also started swirling after Alphabet CEO Sundar Pichai was asked about it a conference, and after Citron Research issued a note saying a deal made sense.

The stock climbed another 3.5% on Sept. 15, after Baird reiterated its outperform rating with a price target of $30. Analyst Colin Sebastian said the company's execution on monetization opportunities is improving, and it isn't exposed to Apple's ad-tracking restrictions in the way that other social media stocks are.

Towards the end of the month, Barron's reported that Elliott Management would like to see the company better monetize its user base or put itself up for sale.

Now what

Pinterest continued to climb in the first week of October, jumping 8% with the help of a Goldman Sachs upgrade even as the S&P 500 was only up modestly. Analyst Eric Sheridan cited improved user growth and engagement trends, and raised his rating to a buy with a price target of $31.

The stars seem to be aligning for Pinterest to deliver better-than-expected third-quarter results when its report comes out around the end of the month. Wall Street expectations are muted, calling for just 5% revenue growth to $665.6 million, and for earnings per share to fall from $0.28 to $0.06, which could set the stock up for an easy win.