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Pinterest: A Number Of Levers For Growth

Apr. 08, 2021 1:11 PM ETPinterest, Inc. (PINS)META, GOOG, GOOGL, SNAP, TWTR, YALA22 Comments
Ishan Puri profile picture
Ishan Puri


  • Online catalogue and visual discovery platform is underappreciated by Wall Street today.
  • Critics worry about MAU saturation, lower average ARPU than peers, and a recent market rotation away from growth has hit the stock hard.
  • Our thesis stands on continued MAU growth from international, ARPU growth levers in LatAm and globally, and a unique front-runner position in social commerce.
  • My proprietary weighted average price target model points to more upside from here (~33%).
  • Pinterest is one of my top positions.

Pinterest Homepage
Photo by seewhatmitchsee/iStock Editorial via Getty Images


Pinterest (NYSE:PINS) represents one of the best secular growth stories in adtech because of its user growth internationally, its ability to scale ARPU significantly versus peers, and its position as a front-runner in

This article was written by

Ishan Puri profile picture
Focused on fundamentals, pricing power, and competitive moats. I like founder-led teams. Looking for the next generation of great businesses, and always open to debating ideas with others.

Analyst’s Disclosure: I am/we are long PINS. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (22)

m8 profile picture
20 Apr. 2021
"Snap and Facebook are monetizing these international users at almost 4x what Pinterest is, suggesting further upside for Pinterest here too."....

Great article. What if PINS' handling of O/S is not as competent as the others as SNAP or FB ?
Ishan Puri profile picture
@m8 good point - i need to look into this. they are still learning
I’m long but...

The ARPU analysis is a bit flawed. All those other guys are built around user spending time on them.

Can’t compare with Facebook because FB KPI is time on platform, which I think is 5-10x higher than Pinterest last I looked.

Pinterest is built around objectives offline. By that analogy Google is the more similar model with Search. So the kpi isn’t time spent but objectives searched.

And similarly monetization will come in the form of transactions.

E.g. user searching for decor and buying it...will encourage decor companies to buy more ads on searches.
SimpleD profile picture
@bensun2 and others
Although PINS is a higher priced (PE, P/B, P/CF ratios) stock than the ulk of what I own, I purchased a small starter position in March on the pullback. I like the platform and the PINS story, but one of the questions I have that prevented me from taking a larger position concerns the issue you raised about time spent on platform. Excellent observation on your part about comparison with FB not being the most relevant comparison. (At least based on personal experience in my household, it seems very unlike FB in terms of time spent on it).
What do you think is an appropriate expectation on ARPU that PINS might achieve one day?. Domestically and internationally? That metric seems as important as any in determining the true upside here.
@SimpleD if you are interested I did publish my own analysis on substack, search by bensun

In short, from a merchants perspective it’s all about ad conversion rate. In the long run, money will flow to clicks that makes the most money. As an advertiser all we ever do is experiment.

Pinterest is better at this than many other platforms. I built Pinterest ARPU using Instagram as a base.

Using a higher conversion assumption, more room to increase ad-load, higher mix of more lucrative demographic (older women), and then relative ratio of time spent I got to $12 vs 4 today, vs 17 on Instagram. I’m assuming pins can get there in 5 years.
Ishan Puri profile picture
@bensun2 Great points here. I do agree it is more intent driven and unless PINS makes some acquisitions to grow in the video vertical it may never get to the same engagement as FB. Ecommerce may be the dark horse upside driver with Story Pins and cataloges
Love PINS! It’ll be a multi-bagger over the next few years
I’m in since $13 and see $100 this year easy. But I wonder about continuing growth after that. Any thoughts on where the stock will be in 3-5 years?
Ishan Puri profile picture
@hermi1 If they can figure out US growth on MAUs, can grow ARPU to near peers (3x upside), I see much more upside.
nsei profile picture
09 Apr. 2021
Nice read and I love how you articulated your bull case. Followed!
Long PINS 🚀
Curious to understand what would change your opinion on the lack of monetization - from "opportunity" to risk?
FringDook profile picture
Bought in two weeks ago at 71.50 it’s been just peachy since then.
@FringDook back to 71
FringDook profile picture
@Peterso21 I sold at 83 on Tuesday :)
Great to be able to read your article, as you were away for some time? I agree, PINS is a 'behind the scenes still' keeper. You've laid out the best reasons....
D Lombardo profile picture
This is a great company. Agreed!

However if the 10Y Rate hits 2% its Party Over for long duration assets.

Why take the risk ?!
@D Lombardo Company growth rate (free cash flow) is far more important than discount rate when valuing companies.
Is there any possibility this gets back into the 70s? I am watching it go up daily trying to get in and it’s frustrating as heck!!
Bnuts Alpha profile picture
@Peterso21 no one can tell you that with any degree of certainty. If you believe in the long term prospects of the company then why do you need to split hairs and buy it at 75 instead of 85? What difference does that make if the stock is 150 in 3-5 years? Start with a small position and then monitor it closely over the next few months if that helps
@Peterso21 Possibility? Sure. Likelihood? No.
@SilverBandit will be buying soon. Thanks! 😀
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