Pinterest ((PINS Quick QuotePINS - Free Report) ) became a Zacks #1 Rank in early April as analysts started to raise estimates ahead of their quarterly report this week.

Pinterest reported strong first-quarter 2024 results on Tuesday, with the bottom and top lines surpassing their respective Zacks Consensus Estimate.

The big story is that lots of architecture solutions for advertising and marketing technology are paying off and providing sustained ROI to sellers, such as bottom-of-funnel direct response ads and supporting ad-tech.

You can get all the quarterly numbers and growth metrics in this article we published Wednesday. Today I want to focus on the analyst reactions.

Monetizing Pinterest Gets Real

Several investment bank analysts were impressed by the quarter and management's ability to turn the levers of growth -- especially capitalizing on key relationships with Google and Amazon.

RBC Capital found that PINS strong Q1 performance was driven by the effectiveness of direct links that resulted in increased advertiser spending due to improved return on ad spend.

"Direct links is working, with advertisers spending more as they see better ROAS," said the RBC led by Brad Erickson.

"From here, we think direct links has only just begun enabling PINS's value-capture from higher conversions," they said, adding that Amazon and Google are open-ended contributors that have only just started.

Erickson also highlighted upcoming artificial intelligence (AI) measurement tools that could provide tailwinds for several years.

RBC raised their price target on PINS to $52 from $48 and reiterated their Outperform rating.

Goldman Sachs analyst Eric Sheridan like the "very strong" results for Q1, and noted "broad-based upside."

"In many ways, we see this quarterly report as evidence of management progress across its mix of product initiatives (shoppable content, direct response/bottom-funnel ad budgets and partnerships aiding in wider scaled monetization)."

Sheridan maintained his Buy rating while raising his price target from $41 to $44 and he added that the company's partnerships with Amazon and Alphabet "are contributing revenue momentum that should continue to build throughout 2024."

JPMorgan analyst Doug Anmuth wrote that Pinterest "shifted into a higher gear of growth with broad-based strength across users & monetization."

Anmuth reiterated a Neutral rating while raising his price target from $38 to $44.

Wedbush analyst Scott Devitt wrote in a note to clients that the PINS results reflected "broad-based strength stemming from ongoing initiatives to improve monetization as well as healthy MAU (monthly active users) and engagement growth."

Devitt observed that Pinterest has started to benefit from the "ongoing adoption of lower funnel advertising tools and new ad surfaces, which are driving monetization improvements."

He maintained a Neutral rating while raising his price target from $38 to $44.

Piper Sandler analyst Thomas Champion wrote that while users accelerated across all geographies, with total MAUs of 512MM (+12% year-over-year), management referred to an "aging down" of the user base and rightly bragged that "Gen-Z now ~40%+ of the user base and growing fastest."

Champion reaffirmed an Overweight rating while lifting his price target from $48 to $50.

Bottom line on PINS: With 17% topline growth expected this year and next to cross $4 billion, PINS only trades at 6 times forward sales. Since it looks like estimates will continue to rise from here, I'd be a buyer of this stylish social-shopping platform that continues to innovate and attract new, and younger, users and advertisers.