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Pinterest Stock: Focus on Monetization, not User Growth

Pinterest (NYSE:PINS) has quickly become one of the most recognizable Internet names in the world over the past few years. The company's namesake website ranks 35th amongst the...
Pinterest Stock: Focus on Monetization, not User Growth © Reuters. Pinterest Stock: Focus on Monetization, not User Growth

Pinterest (NYSE:PINS) has quickly become one of the most recognizable Internet names in the world over the past few years.

The company's namesake website ranks 35th amongst the U.S.'s most visited websites, helping millions of people daily to explore ideas anywhere from recipes to home and style designs.

Pinterest went public in 2019, and while the stock's performance has overall been a success story since then, shares plunged significantly following its most recent quarterly results.

The stock still remains depressed, trading at around $55, considerably lower than its all-time high of $89.90. However, the market may have overreacted, and misunderstood what was a solid quarter. I am bullish on the stock. (See PINS stock charts on TipRanks)

What The Market Has Gotten Wrong

Pinterest's Q2 results came in overall quite strong. Revenues increased 125% year-over-year to $613 million, while adjusted EBITDA was $178 million, against a loss of $33.9 million in the prior-year period.

What most investors likely found underwhelming was Pinterest's MAU (Monthly Active User) evolution. Specifically, MAUs only grew 9% year-over-year to 454 million, while the U.S.-based MAUs actually declined by 5% to 91 million. This may sound worrying, but it lacks perspective.

The biggest misconception is likely the market's approach to Pinterest as a social media network. In that regard, MAU growth of 9% would certainly be worrying, especially considering that an ultra-mature company in the space like Facebook (NASDAQ:FB) (excluding its latest quarter) has consistently grown its MAUs in the double-digits, despite 2.9 billion people already using its family of apps.

However, Pinterest is not a social media company. It may report similar metrics, though as an idea-sharing platform and visual discovery engine, Pinterest should attract different users periodically, and not on a daily/monthly basis.

For example, in the midst of the COVID-19 pandemic, Pinterest was utilized highly by people looking for ideas to renovate their homes amid the working-from-home economy. Therefore, Q2 MAUs lagging somewhat is only reasonable, as the metric competed against a very tough and boosted Q2 2020.

Pinterest's users are not going to be active every other day, but rather only when they have projects around the house, want to be inspired, etc., and then they might not log in again for a few months.

Some may leave, others may join, but investors should be focused on the fact that Pinterest is greatly succeeding in monetizing its user base at any time. Average Revenue Per User (ARPU) grew by 89% globally in Q2 year-over-year, while in the U.S., ARPU grew by 103% during this period.

Even if the company's user base stagnates, Pinterest could increase monetization through a myriad of ways, sustaining growing revenues for years to come.

Considering the company's great growth prospects, high-margin business model (around 80% gross margins), and recent valuation compression to a forward P/S of 15.7, Pinterest could be offering a compelling investment case.

Wall Street’s Take

Turning to Wall Street, Pinterest has a Moderate Buy consensus rating, based on six Buys, 10 Holds, and zero Sells assigned in the past three months. At $71.86,  the averaget PINS price target implies 29.4% upside potential.

Disclosure: On the date of publication, Nikolaos Sismanis had a beneficial long position in the shares of Pinterest through stock ownership.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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24-09-2021 16:13:21 (UTC+7)

EUR/USD

1.1738

+0.0001 (+0.01%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (2)

Sell (3)

EUR/USD

1.1738

+0.0001 (+0.01%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (2)

Sell (3)

GBP/USD

1.3712

-0.0004 (-0.03%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (6)

USD/JPY

110.36

+0.07 (+0.06%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (5)

AUD/USD

0.7275

-0.0020 (-0.27%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (7)

USD/CAD

1.2681

+0.0027 (+0.21%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (5)

Sell (1)

EUR/JPY

129.53

+0.08 (+0.06%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (9)

EUR/CHF

1.0835

-0.0008 (-0.08%)

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↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (8)

Gold Futures

1,755.15

+5.35 (+0.31%)

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↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (0)

Sell (7)

Silver Futures

22.672

-0.007 (-0.03%)

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↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (8)

Copper Futures

4.2260

-0.0050 (-0.12%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (9)

Crude Oil WTI Futures

73.42

+0.12 (+0.16%)

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↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (7)

Brent Oil Futures

77.50

+0.25 (+0.32%)

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Buy (3)

Sell (9)

Indicators:

Buy (0)

Sell (9)

Natural Gas Futures

5.087

+0.111 (+2.23%)

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↑ Buy

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Buy (8)

Sell (4)

Indicators:

Buy (6)

Sell (2)

US Coffee C Futures

193.18

+2.20 (+1.15%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (1)

Sell (8)

Euro Stoxx 50

4,165.51

-29.41 (-0.70%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (8)

S&P 500

4,448.98

+53.34 (+1.21%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (9)

DAX

15,543.35

-100.62 (-0.64%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (6)

FTSE 100

7,061.70

-16.65 (-0.24%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (6)

Hang Seng

24,192.16

-318.82 (-1.30%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (7)

Sell (0)

US Small Cap 2000

2,259.80

+41.24 (+1.86%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (7)

IBEX 35

8,862.50

-14.40 (-0.16%)

Summary

↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (1)

Sell (8)

BASF SE NA O.N.

63.720

-0.200 (-0.31%)

Summary

↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

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Sell (11)

Bayer AG NA

46.35

-0.13 (-0.28%)

Summary

↑ Sell

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Sell (8)

Allianz SE VNA O.N.

192.18

+0.66 (+0.34%)

Summary

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Moving Avg:

Buy (4)

Sell (8)

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Buy (0)

Sell (7)

Adidas AG

280.95

-8.03 (-2.78%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (7)

Deutsche Lufthansa AG

6.213

+0.012 (+0.19%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (0)

Sell (8)

Siemens AG Class N

148.92

-1.30 (-0.87%)

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↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (8)

Deutsche Bank AG

10.718

+0.063 (+0.59%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (1)

Sell (4)

 EUR/USD1.1738↑ Sell
 GBP/USD1.3712↑ Sell
 USD/JPY110.36↑ Sell
 AUD/USD0.7275↑ Sell
 USD/CAD1.2681↑ Buy
 EUR/JPY129.53↑ Sell
 EUR/CHF1.0835↑ Sell
 Gold1,755.15↑ Sell
 Silver22.672↑ Sell
 Copper4.2260↑ Sell
 Crude Oil WTI73.42↑ Sell
 Brent Oil77.50↑ Sell
 Natural Gas5.087↑ Buy
 US Coffee C193.18Neutral
 Euro Stoxx 504,165.51↑ Sell
 S&P 5004,448.98↑ Sell
 DAX15,543.35↑ Sell
 FTSE 1007,061.70↑ Sell
 Hang Seng24,192.16↑ Buy
 Small Cap 20002,259.80↑ Sell
 IBEX 358,862.50↑ Sell
 BASF63.720↑ Sell
 Bayer46.35↑ Sell
 Allianz192.18↑ Sell
 Adidas280.95↑ Sell
 Lufthansa6.213↑ Sell
 Siemens AG148.92↑ Sell
 Deutsche Bank AG10.718Neutral
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,655/ 5,705
(-20/ -20) # 872
SJC HCM5,640/ 5,705
(-30/ -30) # 872
SJC Hanoi5,640/ 5,707
(-30/ -30) # 874
SJC Danang5,640/ 5,707
(-30/ -30) # 874
SJC Nhatrang5,640/ 5,707
(-30/ -30) # 874
SJC Cantho5,640/ 5,707
(-30/ -30) # 874
Cập nhật 24-09-2021 16:13:23
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ↀ Giá vàng thế giới
$1,755.24+9.430.54%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2149021910
RON 95-II,III2139021810
E5 RON 92-II2014020540
DO 0.05S1602016340
DO 0,001S-V1637016690
Dầu hỏa1508015380
ↂ Giá dầu thô thế giới
WTI$73.47-0.71-0.97%
Brent$77.58-1.04-1.34%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.630,0022.860,00
EUR26.044,7927.400,28
GBP30.430,7031.702,11
JPY200,85212,47
KRW16,7620,40
Cập nhật lúc 16:07:23 24/09/2021
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