Pinterest (PINS) AI Stock Analysis

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(NYSE:PINS)

Rating:77Outperform

Price Target:

$37.00

▲( 19.74% Upside)

Pinterest's overall stock score reflects strong financial performance and strategic growth in AI and international markets. Despite technical indicators suggesting overbought conditions, the company's attractive valuation and positive earnings call outlook provide a balanced view. Investors should watch for improvements in operational efficiency and the impact of macroeconomic factors on advertising pricing.

Positive Factors

Product Improvements

Recent product improvements, particularly in performance advertising, are contributing to sustained core fundamentals.

Stock Recommendation

The macroeconomic challenges are less concerning than before, leading to an upgrade in the stock recommendation.

Negative Factors

Competition

Competition is fierce, digital ad spending is sensitive to the vicissitudes of the economy and the macro darkening.

Economic Impact

The nullification of the de minimis exemption has negatively impacted U.S ad spending at Asia-based e-commerce companies.

Pinterest (PINS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$21.48B

Dividend YieldN/A

Average Volume (3M)14.41M

Price to Earnings (P/E)11.5

Beta (1Y)1.54

Revenue Growth17.81%

EPS Growth1175.52%

CountryUS

Employees4,778

SectorCommunication Services

Sector Strength86

IndustryInternet Content & Information

Share Statistics

EPS (TTM)0.23

Shares Outstanding594,233,800

10 Day Avg. Volume19,626,283

30 Day Avg. Volume14,407,369

Financial Highlights & Ratios

PEG Ratio0.01

Price to Book (P/B)4.40

Price to Sales (P/S)0.00

P/FCF Ratio22.37

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$39.83

Price Target Upside28.90% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering32

Pinterest Business Overview & Revenue Model

Company DescriptionPinterest, Inc. is a visual discovery engine company based in the United States, operating within the technology and social media sectors. It provides a platform where users can discover, save, and share ideas for various projects and interests, such as recipes, home decor, fashion, and more. The platform allows users to create and manage theme-based image collections known as 'boards' and browse content posted by other users, which is known as 'Pins.'

How the Company Makes MoneyPinterest primarily makes money through advertising revenue, which is generated by selling ad space to businesses looking to reach its user base. The company's key revenue stream is 'Promoted Pins,' which are paid advertisements that appear within the user's feed and search results as native content. Advertisers pay on a cost-per-click or cost-per-impression basis. Pinterest also offers 'Shopping Ads' and 'Catalogs' to facilitate e-commerce by allowing retailers to upload their product catalogs and create dynamic ads. Additionally, Pinterest has developed partnerships with companies like Shopify to enhance its e-commerce capabilities and provide small to medium-sized businesses with tools to reach potential customers more effectively. These partnerships, along with Pinterest's focus on enhancing user engagement and ad targeting capabilities, contribute significantly to its earnings.

Pinterest Key Performance Indicators (KPIs)

Any

Monthly Active Users by Geography

Monthly Active Users by Geography
Tracks user engagement across different regions, highlighting where Pinterest is gaining traction and identifying markets with high growth potential or competitive challenges.

Chart InsightsPinterest's user growth has been robust, with a significant uptick in the Rest of World segment, reflecting a strategic focus on international expansion. This aligns with the earnings call highlighting a 10% year-over-year increase in global MAUs to 570 million. Despite challenges in ad pricing, the company's AI advancements are enhancing user experience and advertiser performance, driving positive outcomes. The continued growth in Europe and the US and Canada segments underscores Pinterest's successful efforts in expanding its user base and leveraging AI for improved engagement.

Data provided by:

Main Street Data

Pinterest Financial Statement Overview

Summary

Pinterest's financial performance is strong, characterized by robust revenue growth and improved profit margins. The balance sheet is solid with low leverage and high equity ratios, while cash flow generation is healthy though with room for further enhancement.

Income Statement

Very Positive

Pinterest has shown significant improvement in its income statement metrics over the years. The company reported a strong revenue growth rate of 19.4% from 2023 to 2024. Gross profit margin increased to 79.4% in 2024, indicating efficient cost management. The net profit margin surged to 51.1% in 2024, reflecting a positive turnaround from previous losses. However, EBIT and EBITDA margins remain relatively modest at 4.9%, highlighting the need for further operational efficiency improvements.

Balance Sheet

Very Positive

Pinterest's balance sheet is robust, with a low debt-to-equity ratio of 0.03 in 2024, illustrating a conservative leverage approach. The return on equity improved dramatically to 39.2%, indicating effective utilization of shareholder funds. The equity ratio of 88.9% suggests strong financial stability and a solid asset base. The improvements in equity and liabilities management contribute to a strong balance sheet position.

Cash Flow

Positive

The cash flow statement reflects strong operational cash flow management, with a 57.3% increase in free cash flow from 2023 to 2024. The operating cash flow to net income ratio stands at 0.52, demonstrating that operating activities are generating substantial cash relative to net income. The free cash flow to net income ratio of 0.50 suggests a high conversion rate of net income into free cash flow, although further improvements can be made.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.65B	3.06B	2.80B	2.58B	1.69B
	Gross Profit
2.90B	2.37B	2.12B	2.05B	1.24B
	EBIT
179.82M	-125.68M	-101.68M	326.19M	-142.50M
	EBITDA
179.82M	-104.17M	-55.19M	353.69M	-90.03M
	Net Income Common Stockholders
1.86B	-35.61M	-96.05M	316.44M	-128.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.51B	2.51B	2.70B	2.48B	1.76B
	Total Assets
5.34B	3.59B	3.86B	3.54B	2.61B
	Total Debt
151.36M	196.28M	228.97M	209.18M	139.32M
	Net Debt
-985.10M	-1.17B	-1.38B	-1.21B	-529.91M
	Total Liabilities
591.51M	503.73M	581.08M	498.50M	367.09M
	Stockholders Equity
4.75B	3.09B	3.28B	3.04B	2.24B
Cash Flow		Free Cash Flow
939.99M	604.90M	440.22M	743.88M	11.43M
	Operating Cash Flow
964.59M	612.96M	469.20M	752.91M	28.83M
	Investing Cash Flow
-221.02M	-36.99M	-128.25M	-25.86M	-47.62M
	Financing Cash Flow
-968.32M	-826.76M	-148.93M	22.16M	19.64M

Pinterest Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price30.90

Price Trends

50DMA

29.08

Positive

100DMA

31.58

Negative

200DMA

31.38

Negative

Market Momentum

MACD

1.12

Negative

RSI

55.56

Neutral

STOCH

30.15

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PINS, the sentiment is Neutral. The current price of 30.9 is above the 20-day moving average (MA) of 29.58, above the 50-day MA of 29.08, and below the 200-day MA of 31.38, indicating a neutral trend. The MACD of 1.12 indicates Negative momentum. The RSI at 55.56 is Neutral, neither overbought nor oversold. The STOCH value of 30.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PINS.

Pinterest Risk Analysis

Pinterest disclosed 46 risk factors in its most recent earnings report. Pinterest reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

We may be unable to compete effectively for users. Q4, 2024

Pinterest Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PINS	77 Outperform	$21.48B	11.53	48.41%	―	17.81%	1175.52%
YELP	77 Outperform	$2.43B	18.30	19.74%	―	5.93%	29.17%
RDDT	72 Outperform	$18.59B	155.88	5.77%	―	64.12%	―
TWLO	68 Neutral	$17.69B	―	-0.39%	―	9.27%	95.03%
SNAP	66 Neutral	$14.09B	―	-23.97%	―	14.91%	59.90%
Sector *	60 Neutral	$14.12B	6.43	-3.57%	3.69%	2.49%	-35.43%
MTCH	57 Neutral	$7.22B	14.53	-865.98%	1.29%	0.40%	-11.05%

* Communication Services Sector Average

Performance Comparison

PINS

30.90

-10.54

-25.43%

YELP

Yelp

37.40

1.02

2.80%

TWLO

Twilio

113.49

54.44

92.19%

SNAP

Snap

8.23

-6.99

-45.93%

MTCH

Match Group

29.21

0.16

0.55%

RDDT

Reddit Inc Class A

100.76

46.04

84.14%

Pinterest Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 10.91%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Positive

Pinterest demonstrated strong growth in user numbers and revenue, driven by advancements in AI and visual search capabilities. However, challenges remain with declining ad pricing and a fluid macro environment. Despite these challenges, the company's strategic initiatives in AI, international expansion, and product innovation are driving positive outcomes.

Q1-2025 Updates

Positive Updates

Record User Growth

Pinterest reached 570 million MAUs globally, reflecting a 10% growth year-over-year, marking another record number of users.

Strong Revenue Growth

Q1 revenue was $855 million, up 16% year-over-year, demonstrating strong performance for advertisers across the full funnel.

Adjusted EBITDA Growth

Adjusted EBITDA grew to $172 million, with an adjusted EBITDA margin of 20%, an increase of 300 basis points from the previous year.

Advancements in AI and Visual Search

Pinterest's proprietary multimodal AI model is 30% more likely to identify and recommend relevant content than leading off-the-shelf models, enhancing user personalization and engagement.

Performance+ Success

Performance+ outperforms traditional campaigns in 80% of AB tests, driving higher click-through and conversion rates for advertisers.

International Revenue Growth

Revenue from Rest of World grew 49% on a reported basis or 59% on a constant currency basis, driven by international expansion and reseller efforts.

Negative Updates

Decline in Ad Pricing

Ad pricing declined 22% year-over-year due to the international mix shift as Pinterest began to serve ads in previously un-monetized or undermonetized international markets.

Macro Environment Challenges

The macro environment remains uncertain, with some pockets of spend impacted by tariffs, particularly from Asia-based e-commerce retailers in the U.S.

Company Guidance

During Pinterest's first quarter 2025 earnings call, several key metrics and guidance were discussed. Pinterest reported a record number of users, reaching 570 million monthly active users (MAUs), representing a 10% year-over-year growth. The Q1 revenue was $855 million, marking a 16% increase year-over-year. Adjusted EBITDA grew to $172 million, with a focus on profitable growth. The company emphasized leveraging AI to enhance user experience and advertiser performance, resulting in a 4% uplift in click-through rates on ads shown in their related pin surface. Additionally, Pinterest's multimodal AI model, which powers visual search, was noted to be 30% more likely to identify and recommend relevant content compared to leading off-the-shelf models. For the second quarter, Pinterest guided revenue between $960 million and $980 million, indicating a 12% to 15% growth, with an expected adjusted EBITDA ranging from $217 million to $237 million.

Pinterest Corporate Events

Executive/Board Changes

Pinterest Awards CEO Bill Ready $18 Million Stock Units

Neutral

Jan 10, 2025

Pinterest’s Board of Directors has approved a performance-based restricted stock unit award for CEO Bill Ready, valued at $18 million, to encourage long-term shareholder value. The award’s performance period spans three years and the units’ vesting is contingent on the company’s total shareholder return relative to the Nasdaq CTA Internet Index and Mr. Ready’s continued service.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.