Is The Pinterest Stock A Buy Following Q4 Results?

Sam Fried

Table of Contents AirbnbThe Bull Case For Pinterest StockMarketwatch Site LogoSnap Snap Stock Looks Overvalued Amid Growth ProspectsThe Bear Case For Pinterest StockIs The Pinterest Stock A Buy Following Q4 Results? Содержание Airbnb The Bull Case For Pinterest Stock Marketwatch Site Logo Snap Snap Stock Looks Overvalued Amid Growth Prospects […]

Also referred to as the PAUL stocks, they include Lyft, Uber, Pinterest, and Airbnb. All four companies have completed their initial public offerings and are now actively traded on public stock exchanges. Before this round of funding, Pinterest was just hoping its popularity would turn into profits. “My hope is that if we build a service that a lot of people use to plan and discover things, that will be really valuable,” Pinterest CEO Ben Silberman told the Wall Street Journal back in February. It had some vague ideas for how to make real dollars back then, but since the company has yet to implement anything. This latest round of funding put money toward this still moneyless company.

P stands for Pinterest, the web-based photo bulletin board that is also a social network. A stands for Airbnb, the popular short-term rental and experience platform that has revolutionized the travel and lodging industry. And it’s not just this coming advertising implosion that stinks bubble. “We’re the best thing happening in America,” a tech entrepreneur told the Los Angeles Times’s Jessica Guynn, who describes all the crazy spending happening in the Bay Area.

Is Pinterest overvalued

Uber, Lyft’s key competitor in the ride-sharing economy, has had a busy decade since it was formed in 2009 as UberCab. The brainchild of entrepreneurs Travis Kalanick and Garrett Camp, the ride-sharing app operates globally and has expanded into other businesses including food delivery, trucking, and scooter rental. PINS stock is reasonably valued at current prices given its price to earnings multiple.

Airbnb

Going forward, Pinterest might also add AR or augmented reality components to expand its monthly active users and drive top-line growth higher. Pinterest is a visual discovery engine, and the social-media company is valued ata market capof $17.63 billion. It has increased sales from $755.9 million in 2018 to $2.57 billion in 2021, indicating an annual growth rate of 50%.

” might be more famous, but this is where the true value is being created.” True value is an overstatement. (See above.) And, these guys are spending their Facebook IPO money even before it’s cashed out. “Others are spending in advance of their big payday, fueling an economy that’s already humming thanks to the Bay Area’s thriving technology sector,” continues Guynn.

Now, many communities once again have seen home values explode higher. Last year, home price growth jumped 15% nationwide, triple the average rate that occurred in the previous decade, according to real estate analytics firm CoreLogic. The L in LUPA stands for Lyft, the mobile ride-sharing company that emerged as a competitor to Uber in 2012. U stands for Uber, of course, the ubiquitous ride-sharing company that has expanded into other markets.

In the performance outlook, the shares continued to be in the negative trend in the near and long-term while remaining flat for the mid-term. The stock has been considered as overvalued at current levels with a bearish pattern in the chart. Free cash flow is increasingly a figure investors care about, because it’s a sign of how much cash a company has left after paying for normal operations. And perhaps unsurprisingly, given the fact that Facebook has a massive and lucrative user base, it blows away the competition here, too.

The Bull Case For Pinterest Stock

Peter Titmuss / Shutterstock.comLocated in Citrus County, along the state’s west coast, Homosassa Springs is another Florida town that attracted many types of buyers during the pandemic. By the end of 2021, the number of homes for sale had plummeted 25% as buyers snatched up whatever was available. Silicon Valley is an area in Northern California that is home to a large number of innovative technology companies. These four companies were some of the biggest unicorns, which are private startup companies with estimated valuations of more than $1 billion. The popular photo-sharing online pin-up board was the vision of entrepreneurs Ben Silbermann, Paul Sciarra and Evan Sharp, who founded the company in 2010.

Airbnb is also the largest company of the four LUPA stocks by market cap—coming in at $110 billion. For context, that’s double the market cap of the largest hotel chain operator in the world—Marriott . The popular peer-to-peer short-term lodging rental platform has disrupted the travel industry in ways its founders may not have imagined when it was launched in 2008. The company also has expanded into tourism services and other ventures. The company is headquartered in San Francisco but has offices all over the world.

Lyft, the popular ride-sharing app based in San Francisco, was originally founded in 2007 as Bounder Web, Inc. It was founded by entrepreneurs Logan Green and John Zimmer, who are CEO and President of the company. Mginley / Shutterstock.comTo the south of Punta Gorda, Cape Coral has grown at an exponential rate. By one estimate, the population has increased by nearly 700% in the past five decades. LesPalenik / Shutterstock.comNaples has never been cheap, at least by Florida standards. Florida remained open during the COVID-19 pandemic while other states shut down.

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Intraday data delayed at least 15 minutes or per exchange requirements. Victoria Van Pelt / Shutterstock.comOne final Florida city — North Port — rounds out the list of most overvalued markets. In total, six out of the 10 cities on this list are in the Sunshine State. VideoPro2Go / Shutterstock.comIn Flagstaff, soaring housing prices are outpacing rising wages by a wide margin. So, the City Council recently voted unanimously to adopt a 10-year housing plan intended to address the problem.

High housing costs have been a problem in Cape Coral for more than a decade, and Collier County — where the city is located — is promising to explore options for providing more affordable housing. The plan includes perks for homebuyers, such as down-payment assistance. Chris Nunez / Shutterstock.comHome to the famously relocated why is pinterest stock down today London Bridge, Lake Havasu City is another Arizona market on a tear. Allison J. Hahn / Shutterstock.comHow expensive have things gotten in the central Arizona city of Prescott? According to an analysis by the University of Arizona’s Eller College of Management, Prescott was the least affordable metro in Arizona.

Is Pinterest overvalued

All of these companies emerged as part of the app economy and were funded by venture capital and private equity money. They have become strong brands with wide adoption and consumer loyalty, but profits were elusive . Still, their scale and popularity have enticed public markets and investors, with all four having completed their IPOs in the last few years.

Snap Snap Stock Looks Overvalued Amid Growth Prospects

“Now that G.M. has done so in such a large and public way, many of the fence-sitters will know that they’re not alone,” she continued. Analysts expect revenue to rise by 22% to $3.14 billion in 2022 and by 27.7% to $4 billion in 2023. Its adjusted earnings are forecast to expand from $1.13 in 2021 to $1.4 in 2023. We can see that PINS stock is trading at a forward price to 2022 sales multiple of 5.60x and a price to earnings multiple of 24.4x, which is quite reasonable. The majority of the analysts recommended a “hold” rating with an average price target of $20.

  • This quarterly review of Facebook FB, -6.11%stock will show comparisons of key metrics to watch and a summary of the company’s most important issues to help investors make better decisions.
  • One billion dollars sounded like an overvaluation for a smartphone photo app that makes absolutely no money, when Facebook purchased Instagram.
  • Last quarter, the company’s advertising sales totaled $25.4 billion, as it generated a mere $732 million from “other” streams that include its Oculus VR hardware, payments and a handful of other minor business lines.
  • The plan includes perks for homebuyers, such as down-payment assistance.
  • Here are P/E valuations for Facebook and its peers, based on consensus earnings estimates for the next 12 months among analysts polled by FactSet, along with total return figures through April 30.
  • There are some who think the old-school valuation metrics of the past aren’t relevant for a new generation of social media or tech stocks.
  • A unicorn in business refers to a startup company with a value of over $1 billion.

You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Since its IPO, and as of April 9, 2021, shares have fallen nearly 23%. In terms of market cap, Lyft is the smallest of the four with a market value of $20 billion. CMC Markets does not endorse or offer opinion on the trading strategies used by the author.

Sure, these same analysts think Pinterest and Snap may have more implied upside if things go well. But if you’re less interested in up-and-coming social media stocks and instead want to rely on a stable long-term leader, Facebook has plenty to offer. Facebook’s gross margin and operating margin are significantly better than the norm among its closest peers in social media. More than half of home sales in Naples are all-cash deals now, according to Redfin. One Florida real estate agent told Redfin that savvy buyers know that when competition is fierce, cash is king. LUPA stocks are a nickname for four companies that were born in the mobile app generation.

The Bear Case For Pinterest Stock

Last quarter, the company’s advertising sales totaled $25.4 billion, as it generated a mere $732 million from “other” streams that include its Oculus VR hardware, payments and a handful of other minor business lines. Though its “other” segment is growing more quickly, the massive 46% expansion in an already dominant ad business means it matters most to investors. Similar to most other growth stocks, shares ofPinterest have remained volatile in the last few months.

However, it’s important to note that even by these traditional measures, Facebook isn’t overvalued even when you use the calculations of yesteryear, even though it is a relatively new tech-focused stock. Bubbles, as we learned from The New York Times, happen when “mania causes the price of an asset to soar far above its intrinsic worth,” as the Times’s James B Worth put it. One billion dollars sounded like an overvaluation for a smartphone photo app that makes absolutely no money, when Facebook purchased Instagram. One and a half billion sounds similarly absurd, considering Pinterest, too has not proven it can make money. And as Facebook’s IPO shows, even the king the new Internet hasn’t proven itself. That move, while not a blow to Facebook’s $3.7 billion dollars yearly revenue, has the rest of Madison Avenue worried.

Is The Pinterest Stock A Buy Following Q4 Results?

Keep in mind that no two companies are alike — even rivals don’t compete in every space. Any investor needs to do their own research to make informed long-term decisions. Trong Nguyen / Shutterstock.comAs we previously reported, the Austin housing market has gone bonkers. Now, the company has faced multiple lawsuits and several cities have sharply restricted or moved to ban the service. In 2017, co-founder Kalanick stepped down amid controversy and was replaced by former Expedia CEO Dara Khosrowshahi. Its stated mission is “to improve people’s lives with the world’s best transportation.”

Here are P/E valuations for Facebook and its peers, based on consensus earnings estimates for the next 12 months among analysts polled by FactSet, along with total return figures through April 30. Specifically, Facebook’s price-to-earnings (P/E) ratio is 24.4, based on the consensus earnings estimate for the next 12 months among analysts polled by FactSet. The forward P/E ratio for the next year’s earnings forecast is only around 25, while the forward P/E for the S&P 500 Index SPX, -3.41%is 21.9. The forward P/E for the tech-heavy Nasdaq Composite Index COMP, -4.69%is 31.5.

Investopedia does not include all offers available in the marketplace. After receiving a $100 million investment from Japanese e-commerce site Rakuten, the “next Facebook,” got a valuation 50 percent bigger than the already unbelievable price of Instagram. The social-media company explained it aims to improve user engagement https://xcritical.com/ by introducing formats such as short-form video, which should increase the consumer’s shopping intent. So, advertisers will now target customers with a higher interest, thereby improving value for all stakeholders. Facebook’s P/E ratio is in line with the norm for the broader market and well below its peer group.

Facebook Inc. is among the most-searched-for companies on MarketWatch. This quarterly review of Facebook FB, -6.11%stock will show comparisons of key metrics to watch and a summary of the company’s most important issues to help investors make better decisions. A venture capital-backed IPO refers to selling to the public shares in a company that has previously been funded primarily by private investors. The sharing economy is a peer-to-peer activity of acquiring, providing, or sharing access to goods and services often facilitated by an on-line platform.

Analysts tracking PINS stock have a 12-month average price target of $41.86, which is 56% higher than its current trading price. Pinterest’s attractive valuation and massive upside potential coupled with its increasing ARPU make it a top bet right now. International users account for 80% of Pinterest’s total user base, and the company will have to expand its ARPU metrics consistently to drive revenues higher. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only.

You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. You should consider whether you can afford to take the high risk of losing your money. The company has been struggling to drive user growth and engagement as the majority of the investments were centered around content and augmented reality platforms. Snapchat invests in growing its business for the future as the strength and momentum in underlying business fundaments give confidence in long-term growth and profitability. They’re narrowing the gap, though, as Facebook’s margins are steady and both SNAP and PINS are seeing significant user growth. Related to this, it’s worth noting that the vast majority of revenue at Facebook comes from ads it serves on its platform.

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

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