PINS vs. SNAP: TD Cowen Picks the Better Social Media Stock Ahead of Q2 Earnings

TD Cowen’s top analyst, John Blackledge, issued his second-quarter fiscal 2025 previews for leading social media companies Snap (SNAP) and Pinterest (PINS). The firm’s Q2 Ad Check survey indicates stronger demand momentum for Pinterest compared to Snapchat. As a result, Blackledge maintains a “Buy” rating on PINS and a “Hold” rating on SNAP stock.

Both platforms are also benefiting from uncertainty over the future of Chinese short-form video app TikTok’s operations in the U.S., as well as from leadership issues at rival platform X following CEO Linda Yaccarino’s abrupt departure.

First, Let’s Understand the Background

The advertising segments of these companies were expected to be impacted by the U.S. trade tariffs announced in Q1, due to the removal of the de minimis exemption for goods under $800 from China. However, SNAP relies more heavily on Chinese advertisers, while Pinterest benefits from a diverse advertiser base in Europe and other regions, helping it offset losses from China.

With this in mind, the analyst raised the model estimates and price targets for both stocks. Blackledge increased the PINS price target from $40 to $43, implying 19.5% upside potential from current levels. Meanwhile, he lifted SNAP’s price target from $9 to $10, representing 4.8% upside potential from current levels.

Notably, Blackledge is a five-star analyst on TipRanks, ranking #307 out of 9,861 analysts tracked. He boasts a 60% success rate and an average return per rating of 13.60%.

PINS Stock Benefits from Higher Advertising Uptake

In Q2, Blackledge expects Pinterest’s revenues to grow 14.6% year-over-year to $977.9 million, driven by improved monetization and a growing contribution from the company’s new Performance+ advertising tools. The firm’s Ad Check showed strong uptake of Pinterest’s Creative & Automated Bidding offerings so far. Meanwhile, advertisers are increasing their ad spend on Pinterest, with some seeing their spending grow by 66% compared to the same period last year.  

These are the highlights of Blackledge’s optimistic view on PINS stock:

• Pinterest’s Global Monthly Active Users (MAUs) are estimated to reach 578 million in Q2, up 10.7% year-over-year and 1.4% over Q1.
• Nearly 40% of U.S. Pinterest users visit the app or site to search for or shop for products, which is more than double the same metric for other social networks, including Snapchat, Reddit (RDDT), X, and Meta’s (META) Facebook and Instagram apps.
• The survey shows steady growth in the overall time spent and user penetration on PINS compared to both Q1FY25 and the same period last year.   

SNAP Is Benefiting from Growing Subscriber Base

In Q2, Blackledge expects Snapchat’s revenues to grow 12.4% year-over-year to $1.4 billion. This growth is mainly driven by increased advertiser spending on Direct Response (DR) ads and a higher number of users paying for Snapchat+ subscriptions, which are expected to contribute about 37% of new revenue growth in Q2. Moreover, the analyst stated that the impact of tariffs was not as bad as feared, further improving the company’s outlook.

These are the highlights of Blackledge’s optimistic view on SNAP stock:

• Snap’s Daily Active Users (DAUs) are estimated to reach 468 million in Q2, up 7.3% year-over-year and 1.7% over Q1.
• Snapchat is benefiting from the shift in some advertiser spending from TikTok to Snap due to ongoing uncertainty regarding TikTok’s U.S. operations.
• Snap’s brand advertising business remains weak, with most growth coming from DR ads and higher subscriptions.

Ending Thoughts

Overall, while both Snap and Pinterest show promising growth drivers ahead of Q2 earnings, TD Cowen’s analysis suggests Pinterest currently holds a stronger position as the better social media stock to watch. According to the TipRanks Stock Comparison Tool, PINS stock has a “Strong Buy” consensus rating, reflecting Wall Street’s bullish outlook on the stock.