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Pinterest Inc (NYSE:PINS) heads into its second-quarter earnings report with a setup that looks a bit more favorable than it has in recent quarters, even as the fundamental debate about the stock remains unresolved, according to a new note from Jefferies.

The firm, which reiterated a Hold rating and $21 price target on Pinterest, modeled Q2 revenue in line with Street estimates of 15% year-over-year growth, though it sees room for upside toward the high end of the company's guidance range.

On an organic basis, Jefferies noted the Q2 revenue midpoint implies deceleration from 17% year-over-year growth to 13% year-over-year growth, even as the constant currency comp stays stable.

Looking ahead to the third quarter, Jefferies said Street estimates of 14% year-over-year revenue growth look achievable. The Street's Q3 forecast implies just 4% quarter-over-quarter growth, compared with 5% to 8% growth over the past three years, while ongoing tariff refunds could help support advertising budgets among importers.

Comps also ease through the rest of the year, with third and fourth quarter constant currency comps easing by roughly 100 basis points and 300 basis points, respectively.

On profitability, Jefferies expects third-quarter and full-year EBITDA margin guidance to stay in line with or be reiterated at 28% and 29%, respectively.

The firm characterized fiscal 2026 as an investment year for Pinterest, with elevated marketing and R&D spend weighing on margins, though it expects second-half margins to ramp seasonally and gross margin deleverage to peak in the second quarter.

Jefferies pointed out that the full-year EBITDA margin guidance of 29% includes roughly a 100 basis point drag from tvScientific, implying a stable organic EBITDA margin of around 30% year-over-year.

Despite the improved near-term setup and easier comps ahead, Jefferies said its core concerns about Pinterest haven't changed. The firm continues to question the durability of Pinterest's use case as artificial intelligence advances, along with its ability to monetize the platform through a scaled, high-performing direct response ad product.