It’s time to talk about a growing social media play. Here is the breakdown on $PINS, otherwise known as Pinterest.
Current Price: $68.40
52/Wk High: $70.63
52/Wk Low: $10.10
Market Cap: $42.3 billion
Read below for the breakdown!
Pinterest is a digital discovery platform that allows people to create a digital pinboard of ideas, images, services, products, and much more.
The platform allows users to scroll through endless images and videos representing a theme, idea, product, or service. Given the platform's layout, it can be used for e-commerce and can be monetized quite easily.
While many were at one point skeptical about the model and platform, Pinterest is now seeing rapid growth.
In the most recent earnings report management noted that Global Monthly Active Users (MAUs) increased by 37% year over year to a whopping 442 million MAUs.
Not only did Pinterest see outstanding growth in the third quarter, but in 2020 as a whole Pinterest has added over 100 million MAUs with momentum only growing.
As everyone knows though, the social media business is all about monetization and Pinterest is improving from that front.
In 2019 Pinterest maintained an average global revenue per user (ARPU) level of $0.95, but in the most recent Q3 report management reported an ARPU of $1.03, much better than past 2019 levels.
Furthermore, $PINS is wasting no time in finding ways to capitalize on its fast-growing user base. Pinterest for example has partnered with Shopify ($SHOP) to bring product catalogs to Pinterest.
According to $PINS, this integration will allow Shopify users to upload product catalogs into a shoppable pin on the Pinterest platform, therefore making it incredibly easy to shop great products.
Shifting into the numbers Pinterest reported a Q3 beat, with an EPS of $0.13 versus the analyst’s consensus EPS estimate of $0.03. Revenues also continued to grow, with Q3 revenues topping $443 million, representing 58% growth year over year.
On the downside, Pinterest continues to run a loss and reported a net loss of $-94 million which represents 21% of total revenues. On the otherhand, the Adjusted EBITDA came in at $93 million.
As for guidance, management did not go into great detail but did note that Q4 revenues are expected to grow roughly 60% year over year.
When it comes to the balance sheet Pinterest is in strong financial standing.
Total Debt: None
Total Liabilities: $366 million
Total Assets: $2.301 billion
Cash & Short Term Inv: $1.649 billion
Given the solid numbers across the board, Pinterest stock has run big time and the valuation has gotten slightly stretched.
Price to Sales: 30.04x
Price to Book: 21.44x
Taking in the numbers the analysts remain mixed on $PINS with the mean price target currently sitting at $68.14/share, representing a -0.61% downside.
On the flip side, the high price target is $80.00/share, representing a 16.69% gain, while the low price target is $28.00/share, representing a -59.16% loss.
The big money is quite involved as well, with 70.52% of Pinterest being owned by institutions. Top holders include The Vanguard Group, BlackRock Institutional Trust, and Melvin Capital Management.
Taking a look at the technicals, $PINS stock has run 266.42% year to date and continues to make new highs. According to the six-month charts, the MACD has been moving sideways within a tight range around 4.46.
The six-month charts are also indicating an RSI of 65.98 and CCI of 120.79 both of which are on the high end of things. It is also important to note that Pinterest trades just two points off its highs.
In short, Pinterest is a strong long-term play within the social media space but within the short to mid-term a pullback is more likely than a continued rally.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.