PINS - Pinterest: The Stock Will Fly Higher With AI And Shopping Tailwinds

2024-06-13 08:52:38 ET

Summary

• Pinterest reported Q1 FY24 earnings, where revenue and Adjusted EBITDA grew 23% and 318% YoY respectively, with record high MAUs at 518M.
• The company is continuing to progress on deepening user engagement by leveraging AI to build a relevant and personalized end-to-end shopping experience.
• As engagement on the platform grows, the company is delivering greater returns for advertisers as it builds more lower-funnel solutions to capture value.
• While monetization in Europe and RoW remains an uncertainty, there is plenty of whitespace and management is partnering with Google and local sellers to unlock monetization opportunities.
• Assessing both the “good” and the “bad”, I believe that the stock is positioned to drive long-term returns over a 3-year investment horizon, making it a “buy”.

Introduction & Investment Thesis

Pinterest ( PINS ) is a visual search and discovery platform where over 500M Monthly Active Users (“MAUs”) find and save ideas for various interests with the purpose of shopping for those interests later. I initiated a “buy” rating on March 15 where I expected the stock to continue delivering outsized returns as MAUs had started accelerating after the management made huge improvements in building an end-to-end shopping experience for the user, which I believed would drive higher ad load and user monetization. Since the time of my writing, the stock is up 28.4%, outperforming the S&P 500 by more than 4x....

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