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1. Company Snapshot

1.a. Company Description

Pinterest, Inc.operates as a visual discovery engine in the United States and internationally.The company's engine allows people to find inspiration for their lives, including recipes, style and home inspiration, DIY, and others; and provides video, product, and idea pins.


It shows visual machine learning recommendations based on pinners taste and interests.The company was formerly known as Cold Brew Labs Inc.and changed its name to Pinterest, Inc.


in April 2012.Pinterest, Inc.was incorporated in 2008 and is headquartered in San Francisco, California.

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1.b. Last Insights on PINS

Pinterest's recent performance was negatively impacted by disappointing quarterly financial results, with the company posting adjusted earnings per share (EPS) of $0.38, falling short of the $0.42 analyst consensus estimate. Wedbush analysts reduced their target price to $34 per share from $44, citing rising AI risk. The company's Q3 earnings miss and soft outlook led to a significant selloff. Additionally, the company's growth is facing challenges from rising costs and tough competition, which weigh on margins despite solid revenues and AI-driven ad tools.

1.c. Company Highlights

2. Pinterest's Q3 Earnings: A Strong Showing with AI-Driven Growth

Pinterest reported a robust Q3 with revenue growing 17% year-over-year to $1.049 billion, slightly ahead of expectations. The company's adjusted EBITDA margin expanded 170 basis points to 29%, driven by investments in sales and marketing and R&D. Earnings per share (EPS) came in at $0.38, marginally below the estimated $0.4. The company's financial performance was characterized by strong user growth, with monthly active users (MAUs) reaching 600 million, and a significant increase in international ad revenue, which grew 66% in Q3.

Publication Date: Nov -06

📋 Highlights
  • Revenue Growth: Q3 revenue reached $1.049 billion, reflecting a 17% year-over-year increase, driven by robust performance across conversion and awareness objectives.
  • User Base Expansion: Achieved 600 million monthly active users, with Gen Z comprising over 50% of the user base, indicating strong demographic traction.
  • AI-Driven Engagement: AI investments enabled 80 billion monthly queries, with visual search and multimodal models improving shopping recommendations by 34 percentage points over benchmarks.
  • Ad Performance Breakthrough: Outbound clicks to advertisers surged 40% YoY, while Pinterest Performance+ campaigns delivered a 24% higher conversion lift compared to traditional campaigns.
  • International Monetization Progress: International ad revenue grew 66% in Q3, with shopping ads contributing 30% of international revenue (up from 9% in 2023), driven by Europe and Rest of World markets.

User Growth and Engagement

Pinterest's user base continues to grow, with 600 million MAUs, representing a ninth consecutive quarter of record highs. The platform's Gen Z user base comprises over 50% of the total users, indicating a strong appeal to younger generations. The company's AI investments have enhanced its visual search capabilities, with 80 billion monthly queries, driving deeper engagement per user. As Bill Ready, CEO, noted, "We're proactive and anticipate what users love without the user having to ask," highlighting the company's focus on AI-driven commerce.

AI-Driven Ad Performance

Pinterest's ad platform is harnessing AI-driven automation to improve performance and simplify campaign creation for advertisers. The company's Pinterest Performance+ suite has seen a 24% higher conversion lift compared to traditional campaigns. International advertisers are increasingly adopting Pinterest's shopping ad formats, with shopping ad revenue in Europe and the Rest of World growing over 2x faster than overall revenue growth in their respective regions.

Valuation and Growth Prospects

With a P/S Ratio of 4.32 and an EV/EBITDA of 45.72, Pinterest's valuation suggests a premium for its growth prospects. Analysts estimate next year's revenue growth at 14.8%, indicating a continued strong trajectory. The company's focus on AI-driven commerce and ad performance is expected to drive long-term growth, with the potential to expand its market share in the digital advertising space.

International Growth Opportunities

Pinterest is seeing significant growth in international markets, with a 31% increase in Europe ARPU and 44% in Rest of World ARPU. The company's shopping ads are driving commercial intent and behavior, with many years of runway for continued growth in ARPU as it increases product catalogs, adds ad demand, and drives up relevance.

3. NewsRoom

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Dec -04

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Groupe la Francaise Invests $3.49 Million in Pinterest, Inc. $PINS

Dec -04

Source: defenseworld.net

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2 Stocks to Buy Near Their 52-Week Lows

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Have $2,000? These 2 Stocks Could Be Bargain Buys for 2025 and Beyond

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Advisors Asset Management Inc. Decreases Stock Holdings in Pinterest, Inc. $PINS

Nov -26

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Pinterest Post-Q3: Strong Growth Amid Ad-Spend Pressures - A GARP Opportunity

Nov -25

Source: seekingalpha.com

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Steal These 3 Dirt-Cheap Gems Before Wall Street Wakes Up

Nov -25

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CLS vs. PINS: Which Stock Has More Upside Potential Now?

Nov -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.60%)

6. Segments

Internet Information Providers

Expected Growth: 15.6%

Growing demand for online platforms and internet access drives growth, fueled by increasing digitalization, rising online shopping, and Pinterest's expanding user base and improving monetization strategies.

7. Detailed Products

Shopping Ads

Pinterest's shopping ads allow businesses to promote their products directly to users who are actively searching for similar items.

Video Ads

Pinterest's video ads allow businesses to create engaging, full-screen video ads that can be up to 60 minutes long.

Carousel Ads

Pinterest's carousel ads allow businesses to showcase multiple images or cards in a single ad, allowing users to scroll through and engage with different content.

Shopping Catalogs

Pinterest's shopping catalogs allow businesses to upload their product catalogs and enable users to purchase products directly from their Pinterest feed.

Lens

Pinterest's Lens is a camera feature that allows users to take a photo of an object and find similar products or ideas on Pinterest.

Instant Experience

Pinterest's Instant Experience allows businesses to create fast, full-screen experiences that load quickly and seamlessly, allowing users to engage with their brand.

8. Pinterest, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pinterest's unique visual discovery and planning website and mobile app make it difficult for substitutes to emerge, reducing the threat of substitutes.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative platforms, Pinterest's strong brand and user engagement reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Pinterest has a diverse range of suppliers, and the company's strong brand and market position reduce the bargaining power of suppliers.

Threat Of New Entrants

While there are barriers to entry, such as the need for significant investment in technology and marketing, new entrants can still emerge, posing a moderate threat to Pinterest.

Intensity Of Rivalry

The online advertising and social media industries are highly competitive, with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.97%
Debt Cost 8.88%
Equity Weight 94.03%
Equity Cost 8.88%
WACC 8.88%
Leverage 6.35%

11. Quality Control: Pinterest, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Alphabet

A-Score: 5.9/10

Value: 1.8

Growth: 8.3

Quality: 8.4

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

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T-Mobile US

A-Score: 5.7/10

Value: 4.2

Growth: 7.1

Quality: 5.6

Yield: 2.0

Momentum: 6.5

Volatility: 9.0

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Meta

A-Score: 5.3/10

Value: 1.8

Growth: 8.8

Quality: 8.3

Yield: 0.0

Momentum: 7.5

Volatility: 5.7

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DoorDash

A-Score: 5.2/10

Value: 0.2

Growth: 9.1

Quality: 6.3

Yield: 0.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Pinterest

A-Score: 4.8/10

Value: 2.8

Growth: 8.6

Quality: 8.8

Yield: 0.0

Momentum: 4.0

Volatility: 4.7

1-Year Total Return ->

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Snap

A-Score: 3.1/10

Value: 5.3

Growth: 6.4

Quality: 3.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.23$

Current Price

27.23$

Potential

-0.00%

Expected Cash-Flows