Pinterest is undervalued at $19 vs $35 fair value due to North American user growth; main risk is Meta outspending it on AI.
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These are Amazon, Netflix, Uber, Nvidia, Pinterest, Meta, Visa, Adobe , and McDonald's. Let me explain why I believe these stocks represent excellent value at the moment.
Pinterest stock is trading at $19 , and I have calculated its fair value at $35. One of the biggest risks I see with Pinterest is something I mentioned previously regarding Meta Platforms.
Meta is spending so lavishly to improve its platform using artificial intelligence that I fear Meta will capture an increasing market share in the social media sector. Pinterest does not have the scale to invest at levels close to what Meta spends, so the gap between them is likely to widen . This is the biggest risk I see in Pinterest.
However, one of the positives I see in Pinterest is that it attracts millions of new users, specifically in the most profitable category in North America. Average revenue per user in North America is several times higher than anywhere else in the world; Because Americans have greater purchasing power than most other people, advertisers focus their advertising spending on the American consumer.
Pinterest is growing in that category, so this is a positive sign for Pinterest's long-term growth. I see this as an attractive opportunity. I keep Pinterest shares in my investment portfolio because I see them as having an attractive risk-reward ratio.
What this channel has said about $PINS
Parkev Tatevosian, CFA has 3 calls on this stock; only the adjacent ones are shown.