• Lallic Partners

Pinterest Is Near The Light At The End Of The Tunnel

Michael Chai | April 7th 2020

Symbol: PINS

Recommendation level: 7/10

Uptick in Users → More Revenue

Despite Pinterest taking a hit throughout much of the first quarter this year from the outbreak of the coronavirus, Pinterest seems to be seeing the light at the end of the tunnel. Although consumers aren’t willing to spend money as freely as they would because of the virus, the coronavirus brings more active monthly users to their platform. As a result of staying at home in a “lockdown”, many are finding themselves on social media more often. The number of monthly active users rose over to two million last quarter, higher than the estimates made by Wall Street as well as other reputable sources. Moreover, Pinterest reported first-quarter sales of 269 million to 272 million. Although official statistics have yet to be released, these are derived from historical data suggesting close to no change in official statistics. From these numbers, we can expect the current earnings per share (EPS) to beat the projected EPS of -0.33$.

Mid-Long Term Buy

A recommendation for mid to long term investment is the best option. Especially in the situation, it is difficult to predict when the coronavirus pandemic will cool down but the surge in user growth definitely boosted the stock itself in place for their losses in ad revenue. As the coronavirus continues to spread, more and more users will be added to the platform. After this pandemic begins to slow down, Pinterest will resume their ad spending, and consumers will start to spend more money as the economy starts to recover.

Edited by Koki Mashita

Written for Lallic Partners

Cover Page: https://www.marketwatch.com/story/pinterest-stock-plunges-after-post-ipo-earnings-report-2019-05-16

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