pinterest nyse

1. pinterestnysehas been one of the few social media plays on which I have generally been constructive on the back of two main reasons: The business is a combination of savvy social media with commerce, and second, the huge international monetization opportunities still ahead. option risk Early in May I looked at the shares after the company reported first-quarter results in the midst of the Covid-19 crisis, with shares having nearly doubled from the Covid-19 induced lows of $10 to $19 per share. That impressive recovery brought shares back to levels last seen late 2019, marking quite an outperformance. pinterestnyse

2. pinterestnyse

3. As mentioned in the introduction of this article, there are two reasons why I like Pinterest. navistarnyse Let’s dive a little deeper into the first argument as Pinterest is less ”annoying” to users than other social media companies and actually plays quite a useful role for its users, with targeted adds having the potential to contribute to the like ability and use ability of the platform instead of being detrimental. Furthermore, the opportunity to place ”pins” creates a pull model resulting in solid engagement and less of a feeling of being spammed, with the goal being about ideas/products, not so much people. The second reason for my optimism was the huge upside in the international business. ARPU for US users rose 34% to $12.07 in 2019, and despite ARPU for international users being up 115%, it came in at just $0.54 per user, leaving huge opportunities. visa vsmastercard stock While other social networking companies have large gaps as well between domestic and international users’ ARPU, this gap is typically a few factors lower. The Thesis

4. Worse was the comment that April revenues saw single-digit declines which undoubtedly would result in ballooning losses in the near term, yet the $1. navistarnyse 7 billion cash position would come in handy in this environment. Nonetheless, if the situation stabilized I did not see a reason to not expect revenues to come in at approximately $1.5 billion in 2020, reducing forward sales multiples to 7 times sales. That being said, shares have nearly doubled from the recent lows and shares actually outperformed many companies, all while the company could not escape cuts in advertising budgets. Therefore, I concluded to be constructive, yet hold a neutral stance at $18 in May. Good, Better, Good (Again)

5. The 587 million shares outstanding saw a massive lift as they rose overnight from $25 to $34 as Pinterest has been seen as a safe harbor. People across the globe became bored, have more free time and are willing to spend time and are willing to learn about new hobbies/inspiration, as well as home chores and decoration being on the rise. vxx stock options The problem seems that the great expectations have run a bit too far as the equity valuation has risen from just about $5 billion during the worst days amidst Covid-19 to $20 billion now. With net cash balances of $1.7 billion being stable, operating asset valuations have tripled from $3 billion and change to $18 billion! Some Thoughts