Opinions
Darren Sissons
Pinterest
PINS-N
COMMENT
Jun 11, 2019
Stock price when the opinion was issued
You might be interested:
It has been around a long time but many people don't realize that 2 1/2 years ago new management came in and really changed things. They improved the site and are using AI to make both the content and ads more relevant to the users. In the last quarter it had 16% revenue growth and the number of users was up 10% year over year and is accelerating. Ads are increasing too. It also raised guidance. Trades at less than 19 X earnings.
Buy 31 Hold 10 Sell 0
Premium contentThe pin-board style social media platform has seen a 17% increase in quarterly revenues, an 11% increase in monthly users, and says Gen Z now make up the largest user segment -- thanks to its creative use of AI. It trades at 17x earnings and supports a 48% ROE. The company is prudently using some cash reserves to buy back shares. We recommend setting a stop-loss at $30, looking to achieve $43 -- upside potential of 18%. Yield 0%
(Analysts’ price target is $43.15)Growth rates are impressive, with expectations for mid-teens EPS growth. Well over 500M monthly active users (400M outside NA, which is interesting). A social platform, which all have taken over the world. Big competition, but a lucrative area. Reasonable multiple.
No strong opinion against taking a position. However, wonders how wide their standalone moat is. He'd prefer something like META, which has Instagram as part of a much bigger organization.
He's looked at it a few times. The topline is growing nicely and losing less money year-over-year. Its revenue comes from advertising and he's never made money as an investment in companies with ad-based revenue models. He expects PINS to be taken out at some point, either Google or Facebook.