Pinterest Inc. (PINS) saw its shares plummet over 5% in pre-market trading on Monday, as Jefferies downgraded the stock from Buy to Hold, citing concerns over the company's ability to drive near-term revenue growth from new advertising products.

The move came after Jefferies analysts lowered their price target on PINS to $32, down from $40 previously. According to the brokerage, Pinterest's recently launched Performance+ and other ad offerings are too early-stage to drive the mid-teens revenue growth currently implied in Wall Street's estimates for the first quarter of 2025.

Jefferies also warned that Pinterest's pace of margin expansion is likely to slow down following the infrastructure cost optimization efforts of the past two years. The firm believes the social media platform faces challenges in shifting from small-scale experimental brand budgets to larger, consistent "always on" performance ad investments.