The social media stocks have been going nuts throughout COVID-19 but one name is just starting to move big. Here is the breakdown of $PINS otherwise known as Pinterest.
Current Price: $34.19
52/Wk High: $10.10
52/Wk Low: $38.32
Read below for the breakdown!
Pinterest is in all actuality a digital discovery platform in which 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.
Given all of the possibilities, the platform seems ready to grow but since the IPO the stock hasn’t started to move much until recently.
Digging into the current standing of $PINS the past and future look bright. First off, monthly active users for such social platforms is one of the most crucial numbers when it comes to growth.
In the Q2 earnings report monthly active users grew by 39% globally, which is roughly a monthly active user base of 416 million according to fool.com.
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.
Not only that, but Pinterest users will be able to save products and purchase items directly from merchant websites.
$PINS management has not stopped there though. Monetization of the platform is also quickly recovering since the major hit in March.
According to the Q2 report, as of July ad revenues were up a huge 50% YOY and still moving north. This is very exciting, showing investors the platform is further moving in a positive direction when it comes to monetization.
Getting into the latest Q2 report, earnings looked positive and the forecast even better. $PINS delivered a beat with an EPS of $-0.07 versus the expected $-0.13 EPS consensus.
On the downside revenue did fail to grow substantially and came in at a nearly flat $272 million. Not only that but $PINS ran a net loss of $100.7 million.
While the revenue growth was disappointing the company has zero debt on the balance sheet and an excellent cash on hand position of $1.703 billion as of June 30th.
While earnings were mostly positive for Q2 the fantastic Q3 forecast pushed the stock north. $PINS management expects Q3 revenue to grow by roughly 30% YOY and for growth trends to continue.
Given all of the recent positivity on $PINS, the analysts are relatively bullish. Currently, the average price target is $35.47/share representing a 3.74% upside.
Furthermore, the high price target is $45.50/share representing a 33.08% upside and the low is $24.00/share representing a -29.80% downside.
The big money is bullish as well. Currently, 69.73% of $PINS is owned institutionally. Top holders include ARK Investment Management, ArrowMark Colorado Holdings, and BlackRock Institutional Trust.
Finally, digging into the technicals $PINS ran big off of the Q2 earnings and has since been in what seems to be consolidating a price level of roughly $33 to $35 per share. Currently the 6 month RSI sits at 60.69 which is not terrible but definitely is not yet attractive.
Secondly, the 6-month MACD seems to be creating some downside momentum. On the bright side, the long term trend of the stock seems to be north and I see no reason why its upward trend will not continue in the coming months.
Overall I like $PINS but I think the stock could possibly be bought lower. In short, I think Pinterest is a buy but it could go lower before turning back to the upside. Either buy-in at its current price noting it could fall before heading further north, or risk a higher price by waiting for a better buying location.
EAT - SLEEP - PROFIT 💰
Disclaimer: This is not direct financial advice, simply opinion based on independent research.