Pinterest Stock's Rebound Is Gaining Momentum. Is It Too Late to Buy?

Key Points

Pinterest's first-quarter revenue grew 18% year over year -- a re-acceleration from 14% growth in the prior quarter.

The visual discovery platform delivered its 10th consecutive quarter of double-digit user growth.

Shares have soared about 25% from early April.

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In early April, I argued that shares of Pinterest (NYSE: PINS) looked oversold. Concerns about tariffs and a soft advertising backdrop had pushed the stock down sharply, creating a good buying opportunity.

Since then, however, shares have climbed significantly. And on Monday afternoon, they tacked on another big gain after the visual discovery platform reported a strong first quarter. Revenue topped $1 billion, growth reaccelerated, and management's guidance for the second quarter was strong. As of this writing, Pinterest stock has soared about 25% from early April.

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So the obvious question now is whether new investors should still be buying. To answer that, it helps to look closely at what is and isn't working in Pinterest's business right now.

A reaccelerating business

Pinterest's first-quarter revenue rose 18% year over year to more than $1 billion, or 15% growth on a constant-currency basis. That marked a meaningful step up from the 14% growth the company posted in the fourth quarter of 2025 -- a quarter when management itself said it was unsatisfied with the result.

Pinterest also delivered its third consecutive billion-dollar revenue quarter and reached an all-time high of 631 million global monthly active users -- up 11% year over year. That's the 10th straight quarter of double-digit user growth.

International growth, in particular, was striking.

Europe revenue rose 27% to $186 million while its "rest of world" revenue surged 59% to $72 million. U.S. and Canada revenue -- the company's most profitable region -- grew 13% to $750 million.

Profitability is also coming into clearer focus. Pinterest's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $207 million (up 20% year over year) while adjusted earnings per share grew about 17% year over year to $0.27.

A big part of the company's strong performance? Pinterest's artificial intelligence (AI)-powered ad tools are gaining traction. Pinterest Performance+, the company's automated ad suite, now accounts for roughly 30% of lower-funnel revenue just over a year after launch. Further, Pinterest CEO Bill Ready said in the company's first-quarterearnings callthat adopters of Performance+ "grew their lower funnel spend nearly twice the rate of non-adopters" in the period.

Management is pairing this with aggressive capital returns.

Year to date, Pinterest has repurchased about $2 billion of stock, reducing the share count by about 16% from the prior quarter.

Why I'd hold, not buy

But I don't think shares are the strong buy they were.

It comes down to valuation. With shares trading at about $22 as of this writing and analyst forecasts calling for full-year 2026 earnings per share of about $1.77, Pinterest stock now trades at roughly 12 times forward earnings. That is hardly expensive for a company growing revenue at a high-teens pace and producing substantial free cash flow (the company generated $312 million of free cash flow in the quarter alone). But it's no longer the deep discount it was a month ago, and there are other risks.

Consider these reasons to maintain some skepticism: Pinterest's ad pricing fell 5% year over year, with all of the revenue growth coming from a 24% jump in ad impressions. And larger retailers, in particular, remain a drag. Pinterest chief financial officer Julia Donnelly said in theearnings callthat "large retailers remained a headwind to growth, but AI-driven platform improvements, including bidding optimizations we delivered for these advertisers, began to offset some of this headwind later in the quarter."

Finally, international growth -- while a notable tailwind -- also comes at lower monetization rates. Pinterest's global average revenue per user was $1.61 in the quarter, compared to $7.12 in U.S. and Canada. Closing that gap could take years.

So, Pinterest is a better business, but the stock is at a less attractive entry point.

For investors who bought during the spring sell-off, holding here may not be a bad idea. For new investors, however, I think it makes sense to wait for either further proof of accelerating growth -- or another bout of marketwide fear that brings shares back to a deeper discount.

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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pinterest. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.