The social media play dubs itself a “visual discovery engine.” Users’ pages act as virtual pinboards, where they can post items of interest. The idea is the platform can help users with generating ideas or inspiration on a wide range of activities.
The San Francisco company’s technology allows users to take pictures through their smartphones and provides related information and ideas to the object. It is an attractive platform for advertisers hawking their wares, and they are the source of all the firm’s revenue.
Pinterest Stock Analysis
The relative strength line, which gauges a stock’s performance compared to the S&P 500, has been slipping as the stock formed its handle. Investors will want to see this pick up. A rising RS line indicates a stock is outperforming the large-cap benchmark in price action.
Pinterest stock has a perfect IBD Composite Rating of 99. At the moment, stock market performance is its strongest suit, though earnings are improving.
Analysts see full-year earnings popping 126% to 95 cents a share in 2021, before moderating to 34% growth in 2022.
PINS stock is worth keeping a close eye on as it gets set to post earnings after the close. Analysts see the firm turning in a gain of 13 cents, vs. a loss of 7 cents a year ago, according to Zacks Investment Research. Revenue is expected to climb 106% to $561 million.
A key metric for social media stocks is active monthly users. At the end of the Q1, Pinterest had 478 million monthly active users. That’s up 30% from the year-ago period but was short of expectations.
Pinterest said it expects to report “flat” user growth in the U.S. market in the second quarter. More than 75% of users are outside the U.S., although the majority of its revenue is domestic.
Analysts Back PINS Stock
Deutsche Bank analyst Lloyd Walmsley rates Pinterest stock as a buy with a 102 target.
“The company disclosed continued progress on e-commerce initiatives, with both end-user engagement with shopping queries growing strongly, rapid merchant catalog uploading and plans to add native checkout later this year,” he said in a research note.
KeyBanc Capital Markets analyst Justin Patterson was rated Pinterest as overweight with an 89 target.
“We view monthly active user guidance, which Pinterest historically does not provide, as appropriately conservative, and believe several use cases (e.g. travel, wedding) and marketing initiatives could help drive upside,” Patterson wrote in a note to clients.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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