What happened

The market surged on investor optimism toward macroeconomic data on Tuesday but shares of social media platform Pinterest (PINS 0.34%) popped even more than the market. A prominent analyst upgraded his view of the stock and that's why it's beating the 2% gain for the S&P 500. As of 11:40 a.m. ET, Pinterest stock was up 12%.

So what

Analyst Thomas Champion of Piper Sandler upgraded Pinterest stock today, raising his price target from $25 per share to $30 per share, according to The Fly. This makes Pinterest a stock to buy in his estimation, whereas before he had been neutral.

Champion is looking at some behind-the-scenes data that lead him to believe Pinterest's user metrics are improving and rates for advertisements are strong, and he's even bullish about Pinterest's management potentially repurchasing shares, among other things. Indeed, all of this would be good for Pinterest stock and Champion's commentary contributed to its big gains today.

Now what

If Champion's read on the situation holds water, then this is encouraging commentary indeed. Pinterest generates revenue from displaying ads on its platform, which means it needs a high level of platform activity and attractive ad rates to do well. In the third quarter of 2022, monthly active users were up less than 1% year over year and average revenue per user was only up 11% -- hardly strong growth numbers.

Pinterest stock is down 70% from its high reached back in early 2021 because its growth has slowed. And the stock trades at one of its cheapest price-to-sales valuations ever as a result. Given this dynamic, it's possible for Pinterest stock to reach Champion's $30 per share target in short order if its platform demonstrates better growth rates in coming quarters.