Opinions
Bruce Murray
Pinterest
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COMMENT
Aug 30, 2021
Stock price when the opinion was issued
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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.
It is an interesting name. It is very focused on particular interest groups in the social media space. It did well during the pandemic and has pulled back. He does not think it will gain market share from the other social media companies. He would prefer FB-Q or GOOG-Q.