Pinterest Continues With Priorities Amid Strong Growth

Apr. 03, 2020 6:54 PM ETPinterest, Inc. (PINS)12 Comments

Summary

  • Pinterest went public in the U.S. in April 2019.
  • The firm operates a social media website for users worldwide.
  • PINS continues to produce strong growth across numerous metrics and is approached earnings breakeven.
  • The stock has been beaten down with the market sell-off. I believe the effects of Covid-19 will wane with the spring & summer months and country responses.
  • I'm bullish on PINS at this temporarily depressed level.
  • Looking for more stock ideas like this one? Get them exclusively at IPO Edge. Get started today »

Quick Take

Pinterest (NYSE:PINS) went public in April 2019, pricing its shares at $19.00 each while obtaining a market cap at the time of $10 billion.

The firm operates an online social media and network site for consumers worldwide.

PINS continues to produce strong growth metrics and is approaching EPS breakeven.

I’m bullish on the stock at its current depressed level as I believe the Covid-19 pandemic will recede in the coming warmer months (northern Hemisphere) and the firm’s financial results will produce a strong catalyst.

Note: PINS is a candidate for inclusion in my personal portfolio.

Company

San Francisco-based Pinterest was founded in 2010 to provide a destination site for people interested in reimagining their lives.

Management is headed by co-founder and CEO Ben Silbermann, who was previously at Google (GOOG).

Investors include Bessemer Venture Partners, FirstMark, Andreessen Horowitz, Fidelity, and Valiant and the firm has raised approximately $1.5 billion in private investment to-date.

Below is a brief overview video of a Pinterest use case:

Source: Pinterest

According to management, it views its market as the global advertising market for the CPG and retail industries.

Citing an IDC report, this market is expected to grow from $693 billion in 2018 to $826 billion in 2022.

This represents a CAGR of 5%, which while a moderately low growth rate, is still a very large absolute growth in dollars spent.

Management says its growth strategy is to invest in technical innovations to ‘deepen Pinners’ engagement’ with the service, make Pinterest more ‘shoppable’ by adding ecommerce capabilities directly to the experience, localizing Pinterest to users around the world, and bring high-quality commercial content by partnering with select content creators.

User and Customer Acquisition

Pinterest attracts users through online word of mouth and by enabling easy-to-share information on social media networks.

In 2016, the

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This article was written by

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Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in PINS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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