PINS

Pinterest, Inc.

TMT


Presented:02/20/2020
Price:$23.54
Cap:$13.48B
Current Price:$33.67
Cap:$23.10B

Presented

Date02/20/2020
Price$23.54
Market Cap$13.48B
Ent Value$8.99B
P/E RatioN/A
Book Value$3.55
Div Yield0%
Shares O/S572.62M
Ave Daily Vol12,477,990
Short IntN/A

Current

Price$33.67
Market Cap$23.10B
Pinterest, Inc. engages in the operation of a pinboard-style photo-sharing website. It allows users to create and manage theme-based image collections such as events, interests, and hobbies. The company was founded by Benjamin Silbermann, Paul C. Sciarra, and Evan Sharp in October 2008 and is headquartered in San Francisco, CA.

Publicly traded companies mentioned herein: Facebook Inc (FB), Pinterest Inc (PINS), Snap Inc (SNAP), Twitter Inc (TWTR)

Highlights

The presenter is long shares of Pinterest Inc (PINS) believing that it’s a heavily under monetized social media asset with tremendous purchase intent. Even though the monetization potential for PINS is higher than its peers, it is currently monetizing well below comps like SNAP, TWTR, and FB. When analyzed against comps, he sees the highest commercial intent on PINS. Despite an unremarkable stock performance since the company’s April 2019 IPO, the presenter thinks management is shifting priorities toward monetization from a laser focus on user growth and experience. This appears evident in the company’s recent results, management commentary, and the checks with ad agencies. The presenter believes that once monetization starts to meaningful inflect (there are already signs it is improving) in the second half of 2020, it will not go unnoticed by the investment community, which to date has been underwhelmed in this regard. In terms of valuation, the presenter looks at PINS on a three-year revenue CAGR vs. NTM sales multiple. Looking at PINS’s peers, SNAP has a 40% three-year CAGR and trades at 10x NTM Sales, TWTR has a 15% three-year revenue CAGR and trades at 7x NTM sales, and FB has a 20% three-year revenue CAGR and trades at 6x NTM sales. Based on his numbers, PINS’s three-year revenue CAGR is 37%, he applies a 7x multiple to get to his price target range of $38 - $40 by 2022 or 65% - 75% upside from today’s current price.

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Idea Discussion

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