Pinterest: Perspective Matters
- Pinterest continues to trade near the lows of 2021 as user questions mount with the tough comps from the COVID-19 shutdowns.
- The social media platform has grown revenues by 50% in the last year and should maintain solid revenue growth due to higher ARPUs.
- The stock isn't cheap at 10x EV/S multiple, but investors should buy the company on a market induced dip.
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The stock market can be a fickle place with a company valued based on the last quarterly results, not the normal growth rates of the business. Pinterest (PINS) is a prime example of a business that boomed during COVID-19 lockdowns and is now struggling with tough comps. My investment thesis is turning more Bullish on the stock after the excess valuations of early 2021.
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Disclosure: Long TWTR. Please review the disclaimer page for more details.
Update Oct. 27
Amazingly, Pinterest has fallen $20 following the collapse of the acquisition talks with PayPal (PYPL). The stock is now in the buy zone, but the falling knife move makes Pinterest a stock to avoid for now.
Update Oct. 1
Nice dip to $50 this week, but the downtrend doesn't appear broken. The stock is really interesting at $45.