One analyst believes Pinterest Inc's (PINS  ) partnership with Amazon.com Inc (AMZN  ) is off to a hot start and that other ad partners could soon be announced.

What To Know: Pinterest rolled out a third-party ad demand program last year and announced Amazon as its first partner.

The partnership was designed to be implemented over a series of quarters beginning at the end of last year.

After digging into the early trends, Piper Sandler analyst Thomas Champion released some of its findings in a new note to clients this week.

"For our sample of Search terms on Pinterest, we estimate the AMZN Partnership ad mix is ~30%+ and much higher when just looking at Feed ads," Champion said in the note.

The Piper Sandler analyst estimates that about 50% of Pinterest's monthly active users are shoppers with about 60% vertical overlap to Amazon.

If these users click on just one Amazon ad per month, Pinterest should earn about $124 million in incremental revenue from the third-party ads partnership with Amazon, Champion said, adding that such would add about 4% to total revenue growth in 2024.

The analyst also inspected URLs for the different ad units observed in the Pinterest app and found a parameter that appeared to denote ads purchased. He noted that understanding URLs can make it easier to interpret ad-tech changes moving forward.

Champion highlighted a Pinterest profile he discovered called "Shopping Ads Test" that had a URL string that included the word "Google" in it. The analyst suspects that Pinterest has begun testing a new type of ad unit for Alphabet Inc (GOOG  ) (GOOGL  ) through its third-party ads program.

When layering the analyst's estimates for the Amazon partnership with benefits from direct links, Champion sees a bull case supporting approximately 23% revenue growth for 2023.

"As for the stock, PINS remains our top mid-cap pick driven by new products, margin improvements and better user engagement," the analyst said.

Pinterest is scheduled to report fourth-quarter earnings after the market close on Thursday. Analysts are anticipating earnings of 51 cents per share on revenue of approximately $989 million, according to Benzinga Pro.

PINS Price Action: Pinterest shares were up 2.92% at $40.85 at the time of writing, according to Benzinga Pro.