D.A. Davidson has begun formal coverage of two major social platforms, rating Pinterest as a Buy and starting coverage of Snap at Neutral. The firm's analyst, Wyatt Swanson, assigned a $26 price target to Pinterest and a $5 target to Snap.
Swanson characterized Pinterest as shifting "from curation to conversion," noting a string of engagement gains and steady revenue-per-user expansion. Specifically, he pointed out that Pinterest has achieved year-over-year engagement growth in the low double digits for ten consecutive quarters, while global average revenue per user has increased in the mid-to-high single digits.
"PINS valuation has continued to decline even though competition for both engagement and advertiser spend has continued to increase," Swanson said.
The analyst described Pinterest as fundamentally a "vibe curation and inspiration platform that is more episodic than habitual," but emphasized the company's search orientation as a material, underexploited asset. He cited roughly 80 billion monthly searches on the platform, with about half of those searches being commercial in nature - a dynamic Swanson sees as an avenue to drive deeper advertiser conversion.
Swanson singled out Pinterest's automated advertising product, Performance+, as a notable monetization lever. According to his note, roughly 30% of Pinterest's lower-funnel revenue now flows through Performance+, and advertisers who adopt the tool are increasing their lower-funnel spend "at nearly twice the rate of non-adopters." That adoption, in his view, supports the thesis that Pinterest can convert inspiration-oriented usage into measurable commercial outcomes.
On Snap, Swanson identified more pronounced near-term challenges. He highlighted persistent weakness in North American engagement, with daily active users in the region declining 7.1% year-over-year in the first quarter. Advertising revenue growth for Snap in the same period was reported at just 3%, a pace the analyst views as tepid.
Despite those headwinds, Swanson expressed a relative degree of optimism about Snap's subscription efforts. The subscription business has surpassed 25 million subscribers and reached a $1 billion annualized revenue run rate in February, a stream he described as "a segment that appears to be underappreciated by investors." This suggests some offset to advertising pressures, though it has not fully altered the analyst's neutral stance on the stock.
Swanson also took a cautious stance toward Snap's forthcoming hardware, the Specs augmented-reality glasses. Priced at $2,195 and slated to launch in the U.S., U.K. and France this fall, the product's commercial prospects were viewed conservatively. Swanson estimated first-year unit sales in a range between 25,000 and 105,000, and he warned that the hardware business is likely to "continue pressuring margins for the foreseeable future," even as the company itself has acknowledged that broad adoption at that price point is unlikely.
On valuation metrics, Swanson noted a notable shift in market perception. Historically, Snap traded at a premium to Pinterest, but following softer first-quarter results and the Specs announcement, Snap's EV/EBITDA multiple reportedly compressed from roughly 15x at the start of the year to about 7.5x by early July. That level sits near its lowest on record and is well below its one-year average of 18x, according to the analyst's observations.
Overall, the initial coverage contrasts Pinterest's case for accelerating conversion and monetization against Snap's mix of subscription progress and advertising and hardware-related headwinds. The Buy rating on Pinterest reflects the analyst's view that the platform's search-driven and automated ad capabilities can strengthen lower-funnel monetization, while the Neutral on Snap reflects concerns about engagement trends, modest ad growth, and persistent margin pressure from hardware.