Pinterest, Inc. (PINS) Stock Analysis and Metrics

Sector: Communication Services Industry: Internet Content & Information CIK: 0001506293

Market Cap 13.48 Bn

P/B 2.79

P/E 6.78

P/S 3.32

ROIC (Qtr) 5.93

Div Yield % 0.00

Rev 1y % (Qtr) 16.79

Total Debt (Qtr) 205.24 Mn

Debt/Equity (Qtr) 0.04

About

Pinterest, Inc., often referred to as Pinterest, operates in the technology industry, offering a visual search and discovery platform that enables users to explore and save ideas, products, and services. The company went public in 2019, and its Class A common stock trades on the New York Stock Exchange under the symbol PINS. Pinterest's primary service is a mobile application and website that allows users to browse and save content, known as "Pins," to virtual boards. The platform has gained popularity among women, representing two-thirds of the...

Pinterest, Inc., often referred to as Pinterest, operates in the technology industry, offering a visual search and discovery platform that enables users to explore and save ideas, products, and services. The company went public in 2019, and its Class A common stock trades on the New York Stock Exchange under the symbol PINS.

Pinterest's primary service is a mobile application and website that allows users to browse and save content, known as "Pins," to virtual boards. The platform has gained popularity among women, representing two-thirds of the user base, and the younger generation, with Gen Z making up over 40% of the users. Pinterest has a global presence in over 100 countries.

Pinterest generates revenue primarily through advertising, offering a range of ad formats, including standard ads, video ads, shopping ads, carousel ads, and interactive ads. The company's ad auction system optimizes ad delivery based on factors such as ad relevance, creative quality, and the likelihood of desired actions occurring. Pinterest also provides a self-serve Ads Manager platform, enabling advertisers to manage their campaigns and track performance.

In addition to advertising, Pinterest's e-commerce platform generates revenue by allowing users to purchase products directly from the platform. The company has partnerships with various retailers and brands, enabling users to browse and purchase products from different categories, including fashion, beauty, and home decor.

Pinterest competes with other consumer internet companies, including Amazon, Meta (Facebook and Instagram), Google (including YouTube), Snap, TikTok, and X (formerly known as Twitter). The company faces competition in user growth, engagement, and monetization across its business.

Pinterest holds a significant number of issued patents and pending patent applications in the United States and foreign countries, with over 400 and 660 registered trademarks and trademark applications, respectively. The company protects its proprietary technologies and intellectual property through a combination of federal, state, and common-law rights.

Pinterest is subject to various laws and regulations, including data privacy and data protection laws, intellectual property laws, content regulation, and anti-bribery and anti-money laundering laws. The company experiences seasonal fluctuations in user growth, engagement, and monetization, with lower engagement in the second calendar quarter and stronger industry advertising spend in the fourth quarter.

Pinterest prioritizes talent management and development, offering competitive compensation, benefits, and health and wellness programs. The company promotes inclusion and diversity, with a diverse board of directors and leadership team, as well as employee resource groups and initiatives to provide equal opportunities for development.

Price action

Investment thesis

Bull case

Strong operating cash flow of 1.15B provides robust 5.59x coverage of total debt 205.24M, indicating excellent debt servicing capability and financial flexibility.
Strong tangible asset base of 5.41B provides 26.35x coverage of total debt 205.24M, indicating robust asset backing and low credit risk.
Robust free cash flow of 1.12B exceeds capital expenditure of 25.32M by 44.30x, indicating strong organic growth funding capability.
Short-term investments of 1.54B provide solid 4.58x coverage of other current liabilities 335.74M, indicating strong liquidity.
Tangible assets of 5.41B provide robust 16.11x coverage of other current liabilities 335.74M, indicating strong asset backing.

Bear case

Operating cash flow of 1.15B barely covers its investment activities of (136.42M), with a coverage ratio of -8.41, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (136.42M) provide weak support for R&D spending of 1.38B, which is -0.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
The company's operating cash flow of 1.15B shows concerning coverage of stock compensation expenses of 848.71M, with a 1.35 ratio indicating potential earnings quality issues.
Operating cash flow of 1.15B provides minimal -0.72x coverage of tax expenses of (1.59B), suggesting potential tax planning inefficiencies or unsustainable tax positions.
Retained earnings of (148.38M) provide limited buffer against comprehensive income items of 3.83M, which is -38.76x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Internet Content & Information

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	GOOGL	Alphabet Inc.	4,640.35 Bn	165.77	32.68	33.71 Bn
2	META	Meta Platforms, Inc.	1,686.65 Bn	27.90	8.39	83.90 Bn
3	SPOT	Spotify Technology S.A.	90.36 Bn	54.66	4.55	2.57 Bn
4	BIDU	Baidu, Inc.	53.33 Bn	42.19	2.91	13.66 Bn
5	TME	Tencent Music Entertainment Group	24.29 Bn	15.53	5.45	0.54 Bn
6	RDDT	Reddit, Inc.	23.38 Bn	66.97	12.28	0.03 Bn
7	NBIS	Nebius Group N.V.	23.18 Bn	106.27	68.17	4.51 Bn
8	PINS	Pinterest, Inc.	13.48 Bn	6.78	3.32	0.21 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	2.25	1.01
EV to Cash from Ops. EV/CFO	10.81	-2.25
EV to Debt EV to Debt	60.40	25.07
EV to EBIT EV/EBIT	43.87	-22.95
EV to EBITDA EV/EBITDA	40.58	11.41
EV to Free Cash Flow [EV/FCF] EV/FCF	11.05	27.73
EV to Market Cap EV to Market Cap	0.92	1.17
EV to Revenue EV/Rev	3.06	129.45
Price to Book Value [P/B] P/B	2.79	1.09
Price to Earnings [P/E] P/E	6.78	4.69

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Dividend Coverage Ratio	0.00	0.33
Dividend Payout Ratio % Div Payout % (Qtr)	0.00	-9.05
Dividend per Basic Share Div per Share (Qtr)	0.00	0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	0.00	2.62
Interest Coverage Int. cover (Qtr)	-2.51	-207.53

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	-0.90	-24.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	9.35	178.93
Dividend Growth (1y) % Dividend Growth (1y) %	0.00	0.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	1,291.72	32.08
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	126.30	-478.54
EBIT Growth (1y) % EBIT 1y % (Qtr)	146.84	32.57
EBT Growth (1y) % EBT 1y % (Qtr)	63.32	-26.72
EPS Growth (1y) % EPS 1y % (Qtr)	815.62	-16.98
FCF Growth (1y) % FCF 1y % (Qtr)	18.85	17.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	18.35	20.10

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.74	0.73
Cash Payout Ratio Cash Payout (Qtr)	0.00	0.02
Cash Ratio Cash Ratio (Qtr)	2.66	1.52
Current Ratio Curr Ratio (Qtr)	8.36	3.38
Debt to Equity Ratio Debt/Equity (Qtr)	0.04	-0.39
Interest Cover Ratio Int Coverage (Qtr)	-2.51	-207.53
Times Interest Earned Times Interest Earned (Qtr)	-2.51	-207.53

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	7.60	-4,345.07
EBIT Margin % EBIT Margin % (Qtr)	6.97	-4,854.87
EBT Margin % EBT Margin % (Qtr)	9.74	-5,073.45
Gross Margin % Gross Margin % (Qtr)	80.00	58.35
Net Profit Margin % Net Margin % (Qtr)	49.00	-5,074.39

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