By Dean Seal

Shares of Pinterest surged after the company reported its highest monthly active user count on record and Wall Street analysts praised its guidance for the first quarter.

The stock opened the market 22% higher at $40.89. Shares are now trading close to where they were 12 months ago.

The social media company said after the bell Thursday that monthly active users on its platform rose 11% to an all-time high of 553 million in the fourth quarter, largely from gains made outside of Europe and North America.

Pinterest closed out the year with an 18% jump in revenue that cleared analyst targets. Oppenheimer analysts said the company's new ad products and artificial-intelligence tools are driving user engagement and better returns for its advertisers.

The San Francisco-based company is undertaking a similar strategy to Meta Platforms in its use of AI to drive engagement and target advertisements, and it has a better, older and more affluent audience than social-media competitor Snapchat, the Oppenheimer analysts said.

Management expects revenue to jump 13% to 15% in the first quarter to $837 million to $852 million, above the $836 million analysts had been targeting, according to FactSet.

Wedbush analysts said investors are likely seeing the strong outlook as a baseline for 2025 given expectations for growth to accelerate as the year progresses. The top line should get a boost as the company laps weak ad spending from its consumer packaged goods brands, they said.

Analysts from Benchmark upgraded the stock to a buy rating, saying the company's engagement and monetization dynamics are finally in sync thanks in part to AI-related efficiencies.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

February 07, 2025 09:55 ET (14:55 GMT)

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