7. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 66
Pinterest, Inc. (NYSE:PINS) is a prominent social media platform known for its aesthetics. The visual discovery engine is loved by kids and adults alike, allowing users to download wallpapers for their mobile phones, tablets, and desktops. Users also use the app to brainstorm decor ideas, create visual boards, and sell products. As of Q3 2024, the company had over 537 million monthly active users who save more than 1.5 billion pins every week. The platform is also gaining immense traction as a social commerce platform, with more than 50% of users categorizing Pinterest as a place to shop.
Pinterest, Inc. (NYSE:PINS) has introduced a variety of product updates in 2024 to increase usage and enhance product performance. Earlier in June, the company introduced a new way to share Pinterest boards on social media, allowing users to flaunt their aesthetic on more public platforms. More recently on September 24, the company launched a new way to create and share collages, allowing users to mix collages, collaborate with other users, and share them. Pinterest, Inc. (NYSE:PINS) is also working diligently to become a full-funnel advertising solution. To align with the goal, on October 1, the company launched its Pinterest Performance+ Suite, allowing advertisers to use Pinterest Performance+ campaigns to meet sales objectives. These campaigns are highly targeted and time-efficient.
RiverPark Advisors’ RiverPark Large Growth Fund stated the following regarding Pinterest, Inc. (NYSE:PINS) in its Q3 2024 investor letter:
“Pinterest, Inc. (NYSE:PINS): Similar to GOOG, PINS was a top detractor in the third quarter despite reporting solid second quarter results and giving guidance that, it seemed to us, fell within the growth framework issued at the September 2023 Investor Day. Specifically, second quarter Monthly Active Users (MAUs) were 522 million, up 12% year-over-year and 2 million better than estimates, Revenue was $854 million, $5 million better than estimates, and EBITDA was $180 million, $4 million better than estimates. Revenue guidance for the third quarter of $885-900 million (+17% growth) was slightly below expectations and seemed to be what drove the stock down despite being squarely within the company’s 3-5-year guidance of mid-to high teens percentage revenue growth.
We believe Pinterest to be an extremely well-positioned internet advertising platform. Users are increasingly coming to Pinterest to get inspiration for their home, their style, or upcoming travel, which often means they are actively looking for products and services to buy. The company currently has 522 million MAU’s, 2/3 of whom are female (who continue to control the lion’s share of household purchasing budgets), which positions the company well to continue to take share of future ad dollar allocations. Continued growth of MAU’s and ARPU (grew 8% in the quarter), and the ramp of third-party relationships with Amazon and Google, should return the company to revenue growth rates approaching 20% for the coming years. In addition, strong cost controls should drive EBITDA margins back to the 2021 peak (40% v the current 21%), leading to strong growth in earnings and cash flow in the years to come.”
