12:14 PM EDT, 09/24/2024 (MT Newswires) -- Pinterest ( PINS ) has the potential to see upside to user engagement even as its daily active user base is the smallest among social media companies, Oppenheimer said Tuesday.

"Pinterest ( PINS ) operates a global discovery platform with high-intent users in search of products and inspiration, lending itself well to direct response advertising," Oppenheimer analysts, including Jason Helfstein, said in a note to clients. "Relevant ads improve the core user experience, like magazines, driving strong advertiser [return on investment]."

Oppenheimer said its checks indicate that Pinterest ( PINS ) is "more attractive" to advertisers on an ROI basis than Snap (SNAP), mostly because the latter is focused on larger brand advertisers and "struggles" with direct response capabilities.

The company's third-party integrations with Amazon.com ( AMZN ) and Alphabet's (GOOG, GOOGL) Google ( GOOG ) are driving improvements to auction density and pricing, according to the note.

Oppenheimer initiated coverage of Pinterest ( PINS ) with an outperform rating and a $45 price target.

The company's shares were up 2.8% in recent trading.

Price: 31.30, Change: +0.84, Percent Change: +2.76