Pinterest - PINS - Share Chat

Pinterest now has 322 million monthly active users, 2 billion monthly searches, and over 175 billion pins saved. And its growth is extending internationally.

91% of users say Pinterest is filled with positivity, and 89% say they leave feeling empowered.

In the third quarter of 2019, average revenue per user (ARPU) in the U.S. was $2.93. Outside the U.S.? ARPU was just $0.13 - massive growth potential to monetise.

I am going to invest a ton of money in then when my bonus comes in later this month.

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Anyone bullish on this and have some insight to share?

Close to making a profit and is under the IPO price of $19

Or is it just another overvalued tech giant ?

Pros - there is some growth:

  • User base grew to 367 million monthly active users in Q1, up 26% from last year.
  • Q1 revenue came in at $272 million, up ~35% quarter on quarter.

Cons - the growth is slowing and they couldnā€™t capitalise on the Covid-19 lockdowns and resulting e-commerce jump:

  • The user growth has been slowing.
  • Pinterestā€™s revenue for April was down 8% compared to April 2019, showing they didnā€™t capitalise on the lockdown.

Pinterestā€™s revenue comes from digital advertising, which needs two things:

  • A lot of users, and the above chart shows a lot (although far from the behemoth known as Facebook of course), but growth seems low (depending on how you look at it).
  • Advertising spend. According to friends at digital advertising agencies, was quite a bit down in April but came somewhat (but far from entirely) back up in May.

Iā€™ve been looking at e-commerce companies like Boohoo and Etsy that benefited a lot from what our American friends call the health crisis. Too bad Pinterest never properly got into social commerce as they said they would.

Unfortunately, advertising-driven businesses got the short end of the stick, but that might make Pinterest attractive at the right price point. Itā€™s still a smaller user base that can grow and it has leadership in its niche, but it might as well suffer for years due to the epidemic induced advertising spend issues.

TLDR: Maybe, but not for me right now.

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Up 40% today, was at $10 at the bottom of the lockdowns

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For a while I was regretting picking these up after the IPO, I was down for ages but today Iā€™m 129% up on it

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Well done. It shows that patience gets rewarded. This share is another of my regrets. I should have bought it when the price was low.

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Whatā€™s happening with this stock ? Going down and down :neutral_face:

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Missed user growth expectations as people engaged less with the service as lockdowns eased

Is up almost 300% over the last year though

Does anyone know whatā€™s happening with this stock? Iā€™m really new to investing and Iā€™m scared about how much Iā€™m losing here. Is it likely to bounce back?

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Hi @Emso89 it looks like yesterdayā€™s report wasnā€™t a good one. Monthly active user are down 5% which is not a good forward looking indicator, quite a lot of tech stock are finding this as people have other things to do with their attention.

Despite monthly active user declines, Pinterest reported quarterly revenue of $613 million for the quarter, up more than 125% year over year and a net income of $69.4 million, up from a net loss of more than $100.7 million in the year-ago quarter.

Pinterest reported reply good revenues and made a profit for the first time. If you can afford to hold it might be worth while, remember you really only loose the money when you sell.

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Ive entered a position around here again. Previously bought after IPO and sold just before the pandemic (now thereā€™s foresight). Just seems like way too many positives and catalysts at this price - Pinterest TV, huge monetisation potential, low risk of big tech clampdown, good product development, very sticky, takeover potential.

Anybody else adding?

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I hope youā€™re right as Iā€™m currently down about Ā£300 with Pinterest. Fingers crossed!

Whilst Iā€™m more optimistic in the companyā€™s ability to fulfil its earnings potential (Maybe not in Q4 2021, but onwards in 2022 with plans to monetise Pin Ideas), Iā€™m very much afraid that most analysts on Wall Street as well as investors will plunge into the wrong details, like MAUā€™s and downloads, when ARPU should be the more accurate metric to look at. It is the unfortunate reality that the board chooses to constantly highlight MAUā€™s in their earnings more than they do ARPU that causes investors to view Pinterest as a social media platform than what it really is, an aesthetic/image search engine.

Thus, my prediction for the upcoming earnings would be that ARPU in both US and international segments should show growth, but MAUā€™s will either decline or stay relatively unmoved as compared to Q3 2021. And if ARPU and/or net income do not exceed expectations by a huge margin, the stock price will take yet another battering.

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Totally agree, imagine Alphabet showing MAUs front and centre on their earnings releases.
Honestly if it does dip, Iā€™ll have to seriously think making it my top conviction position.

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Based off the noise Iā€™m hearing, people sold $PINS today in after markets because of FUD on Metaā€™s earnings as they reported a big hit from Appleā€™s new privacy laws. I believe this FUD on $PINS to be unfounded for the reason that if anyone has done their due diligence, they would come to realise that Pinterestā€™s revenue model does not heavily rely on the same oneā€™s as Facebook or Snapchat; that is because Pinterest uses first party data rather than the third party data Facebook and Snapchat so heavily rely on, and as such wonā€™t be taking as big of a hit on advertising revenue. This is also the reason behind why Pinterest forces users to sign up before being able to navigate through the app/site without prompts.

If people are selling based off fear of wider advertising spend going down, just take a look at Googleā€™s earnings yesterday when they absolutely obliterated expectations. If anything, I donā€™t see Pinterestā€™s earnings taking a hit tomorrow, but because people are stupid and pay more attention to MAUā€™s than ARPU, youā€™ll never know.

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Upon digging into some 4-Kā€™s since Pinterest reported results for Q3, there has been nothing but insider selling for the past 3 months, albeit in insignificant volumes. However, it seems that the majority of insider selling has been done to cover for tax, remittance, and/or bone fide gift purposes to trust/family members. As such, I donā€™t see this as a sign that insiders are losing confidence. But what I will say is that I am genuinely torn between buying more before earnings tonight or staying put, for the reason that despite my confidence that EPS will beat estimates, the past couple of months have also seen directors resign within the company, showing a lack of confidence in either the business model or company culture.

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The pattern weā€™ve seen across tech recently is that it almost doesnā€™t matter what your earnings (so long as you beat) itā€™s about guidance and future projections. With more in the world to occupy peoples time will pintrest be able to keep that attention?

Great post by the way, I like your reasoning and style of research :ok_hand:t2:

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Cheers, Neil. Whilst I agree with your sentiment that earnings (As long as they beat) arenā€™t of particular interest with big tech, I believe it might not be the case with Pinterest after its battering since the $70/$80 mark. People have been selling off due to FUD about MAUā€™s, earnings, and directors leaving. So, I think if Pinterest smashed earnings, we might just be able to recover ever so slightly from the bottom weā€™re at now.

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Iā€™ve not followed this as closely as you. Their access to first party data isnā€™t something Iā€™d considered before you mentioned it.

Getting half buy and half hold but an average of almost 50% upside shows the analysts are split on this one too.

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Topping up today. Pinterest is a sticky e-commerce focused platform, everything FB isnā€™t so I find their results and guidance irrelevant.

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