Should I Buy Pinterest (PINS)? Finance YouTuber Analysis

The analyst sees Pinterest, a social media platform with over 400 million monthly active users, as having significant growth potential in the advertising industry. Despite being a small player in a trillion-dollar market, continued platform development and increased user engagement could attract more advertisers, driving its stock price from $22 to over $100 per share in 5 years.

“If it continues developing the platform making it attractive and increasing consumer engagement then the company can unlock a bigger opportunity to attract advertisers and easily grow its market price from $22 per share right now to over $100 per share in 5 years.”

The analyst is a fan of Pinterest's user-generated content business model, which he considers lucrative and offering excellent customer value. He calculates a fair value above $59, significantly higher than its current $22 price. He also notes its attractive forward price-to-earnings ratio of 11.9, which is below average for a company still generating above-average growth.

“Pinterest is the fifth one of these very undervalued stocks that I think investors can buy today.”

The analyst owns Pinterest and sees it as an opportunity, valuing it at $59 against a current price of $21. He likes its user-generated content model and new user growth in lucrative regions. While concerned about Meta's competitive advantage due to scale in AI investment, he suggests owning both Meta and Pinterest mitigates this risk, expecting long-term gains if regulatory risks subside.

“Pinterest is trading at just $21 per share and I calculated a fair value of 59. I own Pinterest stock in my portfolio. I love the user generated content business model.”

The analyst believes Pinterest is significantly undervalued, trading at $21.40 compared to an intrinsic value of over $58 per share based on discounted cash flow. He also notes its low forward P/E of 11.6, which is less than half the S&P 500 average and near historical lows for the stock. The company has a strong balance sheet with no debt and growing monthly active users, making it an attractive long-term opportunity.

“if you compare the current market price of $21.40 compared to the intrinsic value I calculated or fair value I calculated at over $58 per share, you can see just how significantly the stock is undervalued based on my discounted cash flow valuation calculation.”

Hoium recommends avoiding Pinterest, noting its declining gross profit margins and negative operating income, which he contrasts with Meta's strong performance. He argues that Pinterest, like Snap, is disadvantaged by the social media industry's winner-take-all dynamics, where Meta's scale makes it difficult for smaller platforms to attract advertiser spending and achieve profitability.

“it makes it really tough to make an investment case for companies like Pinterest and Snapchat”