|Avg Daily Volume: 14,375,360 Market Cap: 15.8B |
Sector: None Short Interest: None
CONSENSUS EPS: -.11/share REV: 200/M
EPS: N/A/share ESTIMATED: N/A/share (—-)
NEXT QTR: EPS: -.08/share REV: 232/M
FY19: EPS: -.13/share REV: 1,060/M
*These are the base metrics we will be watching against the actual release numbers
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Links To Latest News and Headlines
Pinterest (NYSE:PINS) stock popped to all-time highs in late October after the company’s social media peer, Snap (NYSE:SNAP), reported blockbuster earnings that broadly implied that the current operating environment has created a perfect backdrop for digital ad companies to thrive. Source: Nopparat Khokthong / Shutterstock.com The market’s optimism here is not misplaced. We are in the midst of a digital advertising renaissance, and digital advertisers from Pinterest to Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) will follow in Snap’s footsteps and report blockbuster third-quarter numbers in the coming weeks.InvestorPlace – Stock Market News, Stock Advice & Trading Tips The only question, then, is whether or not PINS stock, which is already up 170% year-to-date, is fully priced for a blockbuster Q3 earnings report? I’d argue no. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes Sure, Pinterest stock is richly valued. But this is one of the most exciting companies in the digital ad space, with an exceptionally robust and promising long-term growth trajectory. Against that backdrop, PINS stock still has tons of long-term upside potential. I say hold PINS stock this earnings season, because this is a long-term winner with a huge catalyst on the horizon. A Digital Ad Renaissance Snap’s blockbuster third-quarter earnings report – which smashed user, revenue and profit expectations, and included accelerating user and revenue growth – broadly underscored that we are in the midst of a digital ad renaissance, wherein every company is rushing to put ad dollars to work in high-quality digital channels. The Covid-19 pandemic brought the global economy to a screeching halt at the end of the first quarter of 2020. With the economy not moving, companies stopped advertising. But we have since adjusted to living with the virus and economic activity has rebounded. As economic activity bounced back, companies have put ad dollars back to work because consumers are spending again. Yet, because consumers’ Covid-19 adjustment include living a more “digital” life – i.e. consumers are spending more time than ever on social media platforms – these ad dollars are skipping the TV, radio and billboard ads, and instead rushing at breakneck speeds into digital channels. The result is a perfect operating environment for social media platforms. They are broadly benefiting from a simultaneous rise in engagement and advertiser demand, which is sparking accelerating user and revenue growth. So, social media companies should follow in Snap’s footsteps, and report blockbuster third-quarter numbers over the next few weeks. Perhaps the best earnings report will come from Pinterest, since this is the earliest stage social media platform in the market with the fastest growing ad business. Big picture: Pinterest is probably going to report really good third-quarter numbers, so the late October surge in PINS stock should come as no surprise. Compelling Long-Term Growth Prospects Zooming out, a blockbuster third-quarter earnings report from Pinterest fits in perfectly with this company’s compelling long-term growth narrative. Long story short, Pinterest is a differentiated social media platform with a unique visual-discovery-focused value prop that is both sticky and compelling. Yet, the company is still in the early stages of growing its user base, with just 416 global monthly active users (up 69% year-over-year) versus Facebook at 2.7 billion monthly actives (up 12%). Combining those two realities, it becomes crystal clear that Pinterest has huge runway ahead in terms of sustained double-digit user growth. At the same time, Pinterest’s ad business is also relatively nascent (last year, Pinterest controlled just 0.35% of the global digital ad market) and growing very quickly (in 2019, revenues rose 51% year-over-year). Given the company’s visual-centric feed that attracts interest-minded consumers with intent to buy or do something, it seems that ads on Pinterest should be highly effective. So, Pinterest should be able to sustain enormous growth in its ad business over the next few years, too. Enormous ad business growth plus enormous user growth is a recipe for long-term success in the social media space. PINS stock will charge higher over the next few years thanks to this winning recipe. Pinterest Stock is Worth More than $50 Pinterest stock is a long-term winner with a big near-term catalyst. But what about the valuation? Some will reasonably argue that PINS stock is already fully valued for a blockbuster earnings report as well as huge growth over the next few years. But I don’t think that’s the case. Given that Pinterest is at ~30% internet user penetration in the U.S. today (and that this number is only growing) I think that Pinterest has a visible runway to 1 billion users by the end of the decade, mostly because by that time, there will be over 5 billion global internet users. Concurrently, given that Pinterest’s average revenue per user (ARPU) sits below $3 while less ad-friendly platforms like Twitter have a $10+ ARPU, I also think Pinterest has a visible runway to $10+ ARPU rates by 2030. Assuming so, Pinterest projects as a $10+ billion revenue company in 10 years. My numbers suggest that will flow into roughly $5.50 in earnings per share by 2030. Based on a 20x forward earnings multiple and an 8.5% annual discount rate, that implies a 2020 price target for PINS stock of over $50. Bottom Line on PINS Stock Pinterest stock is a long-term winner, operating in the perfect environment, with a huge near-term catalyst on the horizon and a still tangible valuation. That’s the sort of winning setup which implies that PINS stock should meaningfully outperform in the near term. On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article. The New Daily 10X Stock Report: 98.7% Accuracy – Gains Up to 466.78%. InvestorPlace’s brand-new and highly controversial newsletter… is rocking the industry… delivering one breakthrough stock recommendation each and every trading day… delivered straight to your inbox. 98.7% Accuracy to Date – Gains Up to 466.78%. Now for a limited time… you can get in for just $19. Click here to find out how. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post Snap’s Blowout Earnings Are Great News for Pinterest Stock appeared first on InvestorPlace.
Social media stocks are on fire. Pinterest (NYSE:PINS) is no exception. In fact, PINS stock has doubled just since July and its shares currently trade at their all-time highs. Source: tanuha2001 / Shutterstock.com The latest cause of excitement is earnings from rival Snap (NYSE:SNAP). On Wednesday, SNAP stock surged 28% higher in a single trading session following its Q3 earnings that ran far ahead of expectations. How should investors in PINS stock view the Snap news and the situation more broadly? Pinterest And Snap: Friends Or Foes? On the same day that Snap stock soared 28%, PINS stock also jumped 9% and hit $50 for the first time ever. At first glance, this may seem odd. If Snap is attracting far more users and advertisers than expected, isn’t this bad news for Pinterest? There’s only so much time that people will spend on their screens every day, after all.InvestorPlace – Stock Market News, Stock Advice & Trading Tips 7 Airline Stocks to Buy on Pelosi Stimulus Hopes However, there’s a bullish spin on this as well. For a long time, investors have feared that social media would become a winner-take-all arena with just one tech giant owning all the popular services. The past year is disproving this idea. For one, TikTok emerged seemingly out of nowhere, showing that innovation is still possible. And now the rise of more niche services such as Snap and Pinterest are proving that users are happy to have more than one social network in their lives at the same time. Social media isn’t turning into a winner-take-all like search, for example, where Alphabet (NASDAQ:GOOGL) simply crushed each potential rival into smithereens. In this case, it appears that Snap, Pinterest, and other such rising social networks can peacefully coexist. The bank analysts agree with that take. Both Bank of America and Goldman Sachs upgraded PINS stock on Wednesday following the Snap news. It seems that a rising tide will lift all the social media stocks. Pinterest Is Having A Breakout Year Pinterest hasn’t reported Q3 earnings yet. However, there’s good reason to expect a strong showing, as Snap has already done. It’d merely be a continuation from Pinterest’s great Q2 results after all. After running monthly active user growth figures in the 20%-30% range for an extended period, the quarantine gave Pinterest a major boost. For Q2, Pinterest added 39% to its monthly active users tally. Importantly, Pinterest showed major international market growth as well. This put to rest the argument against the company that it wouldn’t ever gain traction outside the domestic arena. And the news gets even better. The Q2 results were fantastic — PINS stock popped 25% following their release. However, that was even with a major blemish on last quarter. Due to the drastic economic slowdown, many advertisers suspended campaigns and thus Pinterest’s prices on ads plunged. Average revenue per user fell 11% in the U.S. and even more internationally given the advertising slowdown. However, this should reverse in Q3. Just look at the Snap results from this week; things are heading higher again. While the economy is hardly making a flawless recovery yet, there are clear positive developments. This should allow Pinterest to benefit from both faster-than-usual user growth and a swift rebound in average revenue per user in Q3. Add it up, and Pinterest should report a big jump in profits and EBITDA in addition to more sparkling user numbers. PINS Stock Verdict At the beginning of January, I told Investorplace’s readers that PINS stock “should surge in 2020.” Even before Covid-19 entered the picture, Pinterest’s business was running much better than investors were giving it credit for. And now, in an ideal environment for social media stocks, Pinterest is finally having its moment of overdue success. At this point, PINS stock isn’t nearly as obvious a pick as it was in January. But I’m sticking with Pinterest for now. As Snap’s recent earnings bonanza showed, the pandemic boost for social media is far from over. Let’s see how well Pinterest can capitalize on the upcoming quarter now that it’s attracted a far wider range of users and advertisers. And then, in turn, Pinterest should be able to roll this momentum into a fantastic holiday season as well. While PINS stock has run up a lot, there’s still more to look forward to for at least the next few months. On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post Pinterest Still Has More Upside in Coming Months appeared first on InvestorPlace.
Pinterest (NYSE: PINS) has been trending ever higher since its $11 a share low in March 2020, nearly tripling in value over the following months. As a fully online hobby- and interest-sharing social platform, Pinterest has not only benefited from the general public’s increased time online and at home over the past six months, it has positively exploded with increased usage. Pinterest announced earlier this year that it intended to further monetize through an expansion into social commerce, leveraging a partnership with Shopify to let users easily purchase items pinned to their boards.
We've witnessed some wild years on Wall Street, but arguably none has been crazier than 2020. During the first quarter, we watched the widely followed S&P 500 lose more than a third of its value in just over a month, then regain everything that was lost in less than five months.
The charts of Pinterest show two big gaps but with prices extended (overbought) and momentum slowing you should not be too surprised if PINS fills one of these gaps. Let's check out the charts. In this daily Japanese candlestick chart of PINS, below, we can see an upside price gap or a window generated this week.
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Stockjumpers trajectory analysis reveals a negative market reaction to the target’s release news. This is their FIRST reporting quarter since their IPO. They have been one of the better performers of the new crop of tech IPOs in 2019. In its first day on the street the stock opened 25% higher than its $19/share IPO price up to $35/share. It is just under $30/share today. We see them see-sawing on the release news and investors will be looking for clues in the guidance for next quarter.
We are SHORT on the event.
STOP LOSS: N/A (due to whipsaw)
TAKE PROFIT: 10%
UPDATE: (2:05PM) The stock price is up almost 6% – as investors are expecting a positive release. Our data shows a drop and the newest models seem to confirm that. We are still biased short.
POST RELEASE ACTION:
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NOTE: There is a significant amount of data behind the scenes in getting to the analysis in the tab above. Too much information for traders only confuses things – so this is striped down to only what it needed to make the best possible decision(s) on trading the trajectory.