DailyPlay – Opening Trade (PINS) – May 8, 2025

PINS Bullish Opening Trade Signal

Investment Rationale

As Pinterest, Inc. (PINS) approaches its May 8 earnings release, the stock offers an attractive bullish opportunity. Improved market sentiment, recent analyst upgrades, and solid technical indicators point to near-term strength. Investor enthusiasm has returned thanks to strategic AI initiatives and partnerships, with analysts projecting further gains. Given Pinterest’s increasing relative strength, the stock is well-positioned for a defined-risk options strategy.

Price action in PINS has firmed notably in recent sessions, with improving relative strength suggesting buyers are stepping in ahead of earnings. The stock recently rebounded from key support near $25 and is now trending upward into the high $27s. The short-term setup favors continuation toward the mid-to-high $30s range, supported by a constructive base and a modest resistance gap at $32. With implied volatility elevated ahead of earnings and the expected move priced at ±13.34%, a breakout move is possible and favorably skewed to the upside given the sentiment shift.

Pinterest’s underlying fundamentals reflect accelerating performance and margin expansion, which support a bullish thesis into earnings:

• Forward PE Ratio: 24.51 vs. Industry Median 19.6
• Expected EPS Growth: 14.41% vs. Industry Median 18.30%
• Expected Revenue Growth: 51.07% vs. Industry Median 14.33%
• Net Margins: 15.25% vs. Industry Median 6.36%

While the company trades at a premium valuation, its superior revenue growth and margins justify the higher multiple, particularly as AI monetization and product innovation begin to materialize. The Street remains optimistic, with a $40 average price target implying a 46% upside from current levels.

To position for a bullish outlook after earnings, consider the PINS Jun 20, 2025 27/32 call vertical for a net debit. The trade risks only the premium paid and offers a maximum profit if the stock closes at or above the short 32 strike call by expiration. With the current price near $27.34 and an implied move of ±13.34%, the spread targets realistic upside within the expected range.  This structure limits downside exposure, reduces capital outlay, and helps mitigate the impact of implied volatility crush.

PINS – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 11 PINS June 20 $27/$32 Call Vertical Spreads @ $1.84 Debit per Contract.

Total Risk: This trade has a max risk of $2,024 (11 Contracts x $184) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $184 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected bounce higher off recent support.

1M/6M Trends: Neutral/Bearish

Relative Strength: 3/10

OptionsPlay Score: 98

Stop Loss: @ $0.92 (50% loss of premium)

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Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

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