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Pinterest

Taking another look at company with huge potential.

Pinterest: PINS 

This isn't a new stock for us to cover, but it still has potential to keep growing. The price was sitting around $86 a share and then dropped down to $55 a share over growth concerns. Those concerns have subsided somewhat as the price has increased back to $75.88 as of July 8th at close. The company is still doing extremely well and is working on ways to increase users in the future. Let's go ahead and look at a few things; Pinterest's current numbers, their leadership, and the potential of the company. 


First, Pinterest has increased their users from 216mil in 2017 to 478mil in Q1 2021 and, more importantly, increased revenue from 478.8mil to 1.9B in the same time frame—over a 50% increase. As their users increase, so will the desire for advertisement on the platform, creating more revenue. The original concern was the user base in the US. “89 percent of Pinterest revenue is generated in the US, despite only 23 percent of users being located in the country.” If you take a look at the table here, you can see the large disproportion between US revenue and international revenue. 


Price Forecast:

The price should continue to slowly increase over time 

Current Price: $75.80

One Month: $80

One Year: $95

Two Years: $110


Pinterest really has a lot of room to grow in the international market. If they can increase their users, international revenue could skyrocket moving forward. “Digital ad spend hit $378 billion worldwide in 2020, and that figure will only expand in the years ahead.” Pinterest offers a unique way to inspire people to buy things and a unique way for ads to directly target their audience which sets them apart. Ben Silbermann has shown his ability to lead the company and turn Pinterest into a money making machine. Instagram could be seen as a threat to Pinterest. However, the Instagram algorithm is more specific to the user, whereas Pinterest lets you search an idea and get inspiration for that one idea. Pinterest offers a really unique experience. 


Pinterest is learning to monetize more and more of the platform. If Pinterest can continue to increase US and international users, the stock's value should increase fairly quickly. However, even without the increase in users the drastic increase in digital ad spending in the next 5 years will be reason enough alone to invest into PINS. “This year, COVID has helped grow the global digital-advertising and marketing industry to an estimated US$323 billion. The industry is projected to reach $640 billion by 2027.” This is a statistic from an article in 2020, but it still shows the prediction of how huge the digital ad campaigns could be. Pinterest could be a big player for these companies if they continue on their current path. 

All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.

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Until next week,


Brad Mitchell

Colby McCoy

and the Optifinancial Team

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