PINS - Pinterest: A Great Dip-Buying Opportunity Amidst Strong Fundamentals

2024-03-15 11:25:54 ET

Summary

• Pinterest's user growth has rebounded, with 498M monthly active users as of Q4 FY23, as it drives product innovation to attract Gen Z users and expand market share.
• The company is focused on strategic partnerships with advertisers to drive effective user monetization and profitable growth by streamlining expenses.
• Despite risks such as macroeconomic conditions and monetization uncertainty outside US & Canada, Pinterest is undervalued with a potential 25% upside from its current levels.

Introduction and Investment Thesis

Pinterest ( PINS ) is a visual discovery and online bookmarking social platform where users can find and save ideas for various interests with the purpose of shopping for those interests later. The company saw a huge boost in users during the pandemic, leading to a massive spike in its market value in 2021. However, with rising inflation and interest rates, Pinterest’s user growth started to erode, and the stock’s market value dropped by (82)% between 2021 and 2022. Since then, the management has taken active steps to rapidly improve its user experience by adding a suite of search, discovery, and shopping features to the platform....

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