RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned -3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, while the Morningstar Large Growth Category returned -0.07%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
RiverPark Large Growth Fund, in its Q3 2021 investor letter, mentioned Pinterest, Inc. (NYSE: PINS) and discussed its stance on the firm. Pinterest, Inc. is a San Francisco, California-based technology company with a $26.4 billion market capitalization. PINS delivered a -38.48% return since the beginning of the year, while its 12-month returns are down by -42.10%. The stock closed at $40.54 per share on November 29, 2021.
Here is what RiverPark Large Growth Fund has to say about Pinterest, Inc. in its Q3 2021 investor letter:
“PINS was our top detractor for the quarter. Despite reporting better-than-expected revenue and EBITDA, the company reported Monthly Average Users (MAUs) that decreased quarter over quarter, disappointing investors. The company’s 2Q MAU disappointment is mostly attributable to less engaged (and less profitable) users that visit PINS through broad internet searches, rather than regular Pinners who visit PINS mobile apps directly. PINS still posted exceptional revenue growth of 125%, fueled by the combination of 9% year-over-year user growth and 89% ARPU growth. Pinterest also posted high incremental margins, as adjusted EBITDA grew to $178 million for a 29% margin, up from -$34 million for a -12% margin last year.
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’s breadth remains extremely robust as the company currently has 454 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. In addition, PINS’ 2Q ARPU was only $1.32, significantly less than SNAP’s $3, and Facebook’s $10. Closing the ARPU gap with its peers while expanding user engagement should drive a minimum of 40% annual revenue growth over the next few years; additionally, we expect expanding gross margins (from 79% in the second quarter) will lead to improved adjusted EBITDA margins (from 29% last quarter).”
Based on our calculations, Pinterest, Inc. (NYSE: PINS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. PINS was in 58 hedge fund portfolios at the end of the third quarter of 2021, compared to 63 funds in the previous quarter. Pinterest, Inc. (NYSE: PINS) delivered a -28.24% return in the past 3 months.
Disclosure: None. This article is originally published at Insider Monkey.
