almost 3 years ago • 2 mins
Welcome to the third piece in a new mini-series from the Finimize Community: Finimize Pitch Club. You can submit your favorite investment ideas to get feedback from other Finimizers, and practice building a more disciplined approach to your investments.
*This is an educational exercise and the investments have not been vetted by our analysts
Today’s pitch comes from community member Ross Merritt, a UK-based designer.
A long-term investment in Pinterest (ticker: PINS).
A visual search-based social media platform with 459 million active users, which has begun to cleverly monetize its user base in ways that actually enhance the experience.
It’s successfully monetizing the platform via ads and shopping integration (Shopify and Etsy). The average revenue per user (ARPU) is up 50% YoY for US users; up 91% for international users.
Its first-quarter earnings were positive, but the market overreacted to slower-than-expected user growth. Its revenue is up 78% versus last year, and its EBITDA went from negative $53 million to positive $84 million.
Its proven scalability makes for an attractive investment, especially with the tailwinds of a rebound in global advertising spending post downturn.
Future earnings, to see the extent of the monetization of its international user base.
Whether it integrates further with shopping platforms, and how effectively.
The annual Pinterest Predicts report, to see how its data can be used to predict growing trends.
I’m not a huge fan of price targets, as I believe in letting my winners run and adding to winners as new positive information comes to light. If the story no longer makes sense, I reduce my exposure accordingly.
If monthly active users stay flat or decline and ads do not become more effective. I’ll mitigate them by decreasing my holding, and/or increasing my position in competing social media.
*This stock pitch was submitted on April 29th, 2021.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.