Pinterest (PINS) Has Been Punished for Three Quarters. What’s Changed This Time?

Pinterest (PINS) has been punished by the market over the past three quarters, with post-earnings reactions consistently skewing bearish. However, this time could be different as expectations are reset and underlying trends improve. The bar is now much lower, with the market expecting earnings per share (EPS) to shrink 6.5% year-over-year and revenues to grow 13.3% year-over-year — a clear deceleration that has pushed valuation multiples into deep-value territory.

At the same time, while investors remain focused on short-term monetization weakness, the social media platform’s operational signals continue to move in the right direction. Pinterest has sold off sharply, with shares down nearly 25% year-to-date, and the move is starting to look overdone. For those reasons, I believe that going against the current momentum could make sense here, as Pinterest shares now trade at what appears to be a meaningful discount. As a result, I rate PINS a Buy.

Pinterest Enters an Investment Cycle as Growth Slows

Pinterest is set to report its Q1 2026 earnings on May 4 following a bloodbath in Q4 2025, with shares dropping by double digits. Q4 was a disappointing quarter that missed both GAAP earnings and revenue expectations, and the outlook was rather uninspiring. The revenue guidance of 11%–14% year-over-year growth for the quarter isn’t terrible, but it falls short of the management team’s previous ambition of mid-to-high teens growth.

Furthermore, the expectation that EBITDA margins will remain at 30% for FY26 is essentially flat compared to FY25. In other words, Pinterest has signaled a continued slowdown in its top line alongside stagnant margins. This is partially justified by the current investment cycle, which is offsetting the potential for operating leverage. It is also expected to generate nearly 100 basis points (bps) of margin pressure from cost of revenue, primarily driven by graphics processing unit (GPU) and artificial intelligence (AI) infrastructure.

To put this into context, Pinterest has been opening its coffers to invest in rebuilding its core product and a monetization engine around it using AI. According to management, investments in core ranking and recommendation models, as well as a foundational ranking model and a new internal framework to scale AI without blowing up costs, should drive a meaningful increase in the number of saves. In other words, more users will bookmark or pin content to their boards.

Higher saves improve personalization, which increases the likelihood of conversion and, ultimately, average revenue per user (ARPU). While this doesn’t immediately show up in revenue, it strengthens the monetization engine’s foundation and supports future operating leverage.

The Gap between User Growth and Monetization

Looking at the most recent operational data, the real story is that Pinterest’s challenge isn’t with users but with monetization. In terms of monthly active users (MAU), Pinterest reported 619 million users, a 12% year-over-year increase, and 19 million net adds in the quarter. These are not trivial numbers for a platform that is already quite large.

User growth has also been broad-based across all geographies, not just “weak growth” in emerging markets, which points to solid quality in that growth. This growth is particularly notable in the U.S. and Canada (UCAN), Pinterest’s most valuable region, which accounts for roughly 75% of revenue, where user additions remained steady amid broader global expansion.

The contrast becomes clear when MAU and engagement continue to grow while revenue decelerates. When looking at a more appropriate year-over-year comparison, UCAN ARPU has continued to trend higher — from $8.07 in Q4 2023 to $9 in Q4 2024 and $9.41 in Q4 2025. That implies growth of roughly 11.5% year-over-year in 2024, slowing to about 4.6% year-over-year in 2025. On a two-year basis, ARPU is still up nearly 17%, but the pace of expansion has clearly moderated, suggesting deceleration rather than a structural decline.

At first glance, weak monetization may seem concerning. However, I would argue it’s more of a setup than a structural problem. A lack of demand would be far worse. The fact that user growth and engagement remain strong suggests that demand for the platform remains strong.

Pinterest’s Valuation Looks Cheap Relative to Growth

Even after the earnings miss and lower EPS forecasts, sentiment remains weak. Still, PINS appears to be trading at a pretty undemanding valuation.

Pinterest, at $20.12, trades at a forward non-GAAP P/E of about 10.4x. Consensus calls for an EPS compounded annual growth rate (CAGR) of around 18% over the next three to five years, largely driven by operating leverage. That is, profits grow faster than revenues as costs scale more slowly. Based on that growth rate and the current forward P/E, we get to a PEG of just 0.60, which typically suggests the market may be undervaluing that expected growth.

Is PINS a Buy, Hold, or Sell, According to Wall Street Analysts?

Wall Street is fairly split on Pinterest stock. Of the 31 most recent ratings, 14 are Buy and 17 are Hold, resulting in a Moderate Buy consensus. The average price target sits at $23.49, implying about 16.75% upside from current levels.

Monetization Concerns, but Upside Remains

I see a disconnect in the Pinterest thesis: the stock is trading at very depressed multiples, yet the business itself remains quite resilient operationally. Monetization has clearly been a weak spot, but to me, that gap already looks well reflected in the post-sell-off share price.

I don’t think Q1 will mark a clear inflection point for the story. In fact, a few more quarters of pressure could still weigh on sentiment and delay a more meaningful rebound in the near term. That being said, the setup is still constructive in my view. Pinterest is now playing offense, investing in AI-driven improvements, and should start to see solid operating leverage kick in starting next year. For that reason, I rate PINS a Buy here.