7 Cheap Internet Stocks To Invest In Now

3. Pinterest, Inc. (NYSE:PINS)

Forward P/E Ratio: 22.03

Earnings Growth This Year: 33.00% 

Number of Hedge Fund Holders: 61

The next company on our list of cheap internet stocks to invest in now has blended the two major concepts of the internet industry to near perfection. Social media and e-commerce are two major components of the greater internet market and the company in question Pinterest, Inc. (NYSE:PINS) has utilized these fields to optimize the decision-making process of users.

The platform captures the users in their discovery phase by giving them inspiration and ideas of their interest. This business model naturally attracts lots of advertisement revenue as companies can use this intent to market personalized content thereby generating a lot of clicks and impressions.

Pinterest, Inc. (NYSE:PINS) has a strong user engagement, the second quarter of 2024 revealed that the company has grown its monthly active users by 12% year-over-year to reach $522 million. This information becomes more important with the fact that around 40% of its user base belongs to Gen Z, who quickly share content driving more user engagement.

The robust investment case is backed by strong financials. The revenue of the company grew 21% globally with Europe revenue growth by 25%. Pinterest, Inc. (NYSE:PINS) has been improving its cost structure, which was evidenced by an 8% increase in average revenue per user.

Everything we have talked about yet becomes more attractive with the cheap valuation of the company. PINS is trading at a forward P/E of 22.03, which is below the market average which sits around 24. On top of that its earnings are expected to grow by 33% during the year, making it undervalued at current levels.

Columbia Contrarian Core Fund stated the following regarding Pinterest, Inc. (NYSE:PINS) in its Q2 2024 investor letter:

“Pinterest, Inc. (NYSE:PINS) – Pinterest delivered first-quarter results at the end of April that were nicely ahead of both consensus expectations and company guidance, resulting in a 6% revenue beat and a 45% free cash flow beat. Its share price rose following the earnings release and continued to move higher throughout the quarter. The company’s prospects should continue to improve as Pinterest is starting to take more and more of its advertisers’ budgets, as its data-rich initiatives are starting to pay greater dividends. Pinterest is a visual search engine with very high commercial intent and exposure to e-commerce growth. E-commerce growth has been a significant driver of global digital ad spending, which is an approximately $400 billion global market.”