Pinterest Sees an Uptrend in Estimates: Time to Buy PINS Stock?

Pinterest, Inc. PINS has witnessed an uptrend in estimate revisions driven by the strength of its business model. Earnings estimates for Pinterest for 2024 have jumped 4.1% to $1.51 over the past 60 days, while the same for 2025 has increased 2.3% to $1.77. The positive estimate revision portrays bullish sentiments about the stock’s growth potential.Image Source: Zacks Investment ResearchPINS Rides on Unique Value PropositionBuoyed by greater user engagement, Pinterest has created a niche in the digital market platform. It primarily caters to the ‘discovery’ mindset of people who turn to the platform to get more information on various subjects like weddings, fashion or fitness but are not necessarily looking for a specific item. They are there to discover or be inspired, which presents an appealing opportunity to advertisers, as users are often very open to purchasing.Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for new ways to reach customers and stretch smaller ad budgets. Pinterest’s Verified Merchants Program allows brands to create a catalog of shoppable products on the app and use special re-targeting capabilities in their ads. In addition, Pinterest is taking various initiatives to bring more actionable content on the platform from a wide range of sources such as users, creators, publishers and retailers. This has resulted in a solid improvement in engagement metrics like sessions, impressions and saves across all regions. Healthy traction in emerging verticals like men’s fashion, auto, health and travel are tailwinds. Management's decision to increase the accessibility of mobile deep linking (MDL) products to more advertisers has improved shoppability on the platform. The MDL solution is well-suited for retailers who aim to drive more purchases through their mobile app. This has significantly boosted shopping ads’ revenue generation.AI Traction Aids PINSThe company’s focus on improving operational rigor and incorporation of sophisticated AI (artificial intelligence) models to enhance relevancy and personalization is likely to bring long-term benefits. Pinterest is also emphasizing building new ad tools and formats to help grow the scope of monetization on the platform. This will enable advertisers to measure the results and conversion rates, which will improve their decision-making. It has partnered with Amazon.com, Inc. AMZN to further capitalize on the commercial intent of its user base and increase shoppability on its platform. The buyout of the AI-powered, high-tech fashion-shopping platform, The Yes, has enabled it to create a strategic organization to help steer the evolution of its features and merchants. Pinterest and The Yes share a common vision of making it easy for customers to find products matching their tastes and styles. The combined company has been making continuous efforts to absorb creators publishing videos and live streams to make the shopping experience swift and easy for customers.PINS Stock Price PerformanceDespite the positives, Pinterest has declined 17.1% over the past year against the industry’s growth of 49.6%. It has outperformed its peers like Snap Inc. SNAP but lagged Meta Platforms, Inc. META over this period.PINS Stock One-Year Price PerformanceImage Source: Zacks Investment ResearchHigh Cost of Revenues Weigh on PINS MarginsPinterest expects operating expenses to increase substantially in the near term as it expands operations domestically and internationally, enhancing product offerings, broadening user and advertiser base, expanding marketing channels, hiring additional employees and developing technology. Increased infrastructure spending related to user and engagement growth is likely to result in higher cost of revenues.In addition, Pinterest faces significant competition from larger, more established companies such as Amazon, Facebook (including Instagram), Google, Snap and Twitter. These companies provide their users with a variety of online products, services, content (including video) and advertising offerings, including web search engines, social networks and other means of discovering, using or acquiring goods and services. PINS also faces competition from smaller firms, including Allrecipes, Houzz and Tastemade, which offer users engaging content and commerce opportunities through similar technology, products and features or services.Image Source: Zacks Investment ResearchEnd NotePinterest is witnessing solid net sales growth backed by strong user engagement across all regions. Enhancements in lower funnel solutions like MDL, shopping ads and API for conversions are providing a sustained return on investment to advertisers. Through third-party ad integration with Google, Pinterest aims to introduce monetization opportunities in several unmonetized international markets. The uptrend in estimate revisions further signifies bullish sentiments on the stock.However, increasing competition from other video-centric consumer apps is likely to adversely impact user engagement to some extent. High operating expenses to expand operations and incorporate the latest technological innovations are expected to dent its profitability. With a Zacks Rank #3 (Hold), Pinterest appears to be treading in the middle of the road and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Snap Inc. (SNAP): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks