PINS - Pinterest: Platform Strengths Becoming More Apparent

2024-04-11 00:39:57 ET

Summary

• Pinterest is recovering from a difficult multi-year period, with revenue growth accelerating despite pricing challenges.
• The company's share price and narrative have not fully recovered from the decline in users in 2021.
• As a result, Pinterest's stock should perform well over the next 3-5 years, particularly given the strength of the company's balance sheet.

Pinterest ( PINS ) is emerging from a difficult multi-year period, with solid user growth and revenue growth accelerating. Pinterest's margins are also increasing, and the company will begin to generate meaningful cash flows over the next few years. Pricing remains a headwind, though, which is masking some of the improvements.

The company's share price is yet to fully recover from the MAU decline in 2021, and the consequent narrative that characterized Pinterest as a dying platform. Pinterest should see strong earnings growth over the next 5-10 years, along with stable or even improving multiples, leading to strong returns....

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