invest in Pinterest
Stock Market Analysis

3 Reasons You Should Invest In Pinterest

The company’s shares soared after posting an earnings beat that exceeded analysts’ expectations.

If you have heard the term “pin it”, then you will know about the online bulletin-board platform called Pinterest (NYSE: PINS). The company is clearly growing in popularity after revealing its fourth-quarter earnings for 2019 on February 6, with shares climbing by nearly 10% in Friday trading. Pinterest beat both the top and bottom lines for the quarter, posting revenue of $400 million compared to analysts’ prediction of $371 million. Here are the three main reasons why Pinterest is worth investing in:

1. Increased Earnings

The company’s revenue soared by 46% in the quarter compared to the same time the year prior. In addition, adjusted earnings per share reached 12 cents for the fourth quarter, up from analysts’ consensus of 8 cents. The outlook for the coming year is also beyond what experts predicted after the company said its revenue increased to $1.52 billion, compared to estimates of $1.5 billion. 

These latest results and the company’s guidance are an indication that the recent adjustments to the app are paying off. Last quarter, Pinterest revealed it redesigned the app to make it easier for users to discover new ideas.

2. More Users Are Joining The Platform

Pinterest is also focusing on strengthening its shopping experience for its users and speeding up the performance of the app. 

On its latest earnings call, Pinterest reported that its global monthly active users jumped by 26% year on year to 335 million. The platform’s International Monthly Active Users (MAUs) increased by 35% to 247 million and in the United States, users climbed by 8% to 88 million. Annual revenue per year (ARPU) surpassed $1 billion for the first time last year as it honed in on product improvements and shopping experiences. This is great news for the company which historically has low ARPU for its international users.

Pinterest is also focusing on expanding its presence in Europe, adding six new markets in 2019, including the likes of Germany and Italy. In addition, CEO Ben Silbermann mentioned that in 2020 the company would be focusing on delivering relevant content, ads and shopping experiences.

Our Microsoft investment has grown over 200%

3. Not Your Typical Social Media Platform

These days most people are connected to social media, dominated by the likes of Facebook (NASDAQ: FB), Instagram, and Twitter (NYSE: TWTR). It would be easy to dismiss Pinterest as competition, but the company isn’t a copycat of the other social media giants as it encourages users to share “pins” with each other or save the ones they like for themselves.

Pinterest refers to itself as a “social discovery engine” which leads to an important function of the platform — a search engine. The majority of Pinterest’s users take advantage of being able to search for various shopping items, trends, and recipes. This is a huge invitation to businesses that are trying to reach a specific audience through marketing.

It’s, therefore, no surprise that Pinterest generates the majority of its revenue by selling ads. The company has also said it will be launching its Verified Merchant Program, so pinners will know where they are buying from merchants that meet Pinterest’s quality guidelines.

However, with the uniqueness of the company’s platform, there is no reason  Pinterest won’t be able to survive against its tough competitors.

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold no positions in Pinterest. Read our full disclosure policy here

Written by Alsha Coppolina.

MyWallSt Contributor
MyWallSt Contributor
This article was written by one of our MyWallSt freelancers.

Leave a Reply

Your email address will not be published. Required fields are marked *