The better news? This growth story is just getting started, because the company still has a long ways to go in terms of growing its user base and ramping its ad platform.Ĭonsequently, this big rally in PINS stock is far from over. Pinterest is firing on all cylinders today. Assuming so, my modeling suggests that Pinterest will do about $10 in earnings per share by 2030.īased on a 20X forward earnings multiple, that implies a long-term price target for PINS stock of $200. Operating margins have the potential to land north of 40%. Putting those two together, Pinterest is a $20-plus billion revenue business in the making.
At the same time, annual ARPU rates should climb to about $20, thanks to the company’s strong ad conversion rates. Pinterest’s user base will top a billion users by 2030. My numbers say that PINS stock is on track to hit $200 in the long run. Such robust revenue growth will drive positive operating leverage through economies of scale. Revenue growth will remain robust for a lot longer. Thus, Pinterest still a long ways to go in terms of growing its user base and how much money it makes from each of those users. Pinterest - given its intention-driven user base and shoppable features - is also on track to hit those ARPU levels (if not higher). Many more established social media platforms net ARPU rates north of $10. Meanwhile, the company’s ARPU in the quarter was $1.57. Pinterest - given its value prop as a visual discovery engine in a visual-focused world - is on track to reach that level of ubiquity. Many of the world’s largest social media platforms have over a billion MAUs. Pinterest closed the year with 459 million MAUs. The best thing about Pinterest? The company is still in the first few innings of its growth. Put it all together, and it’s no wonder PINS stock popped to all-time highs. Enormous margin expansion to the some of the highest profit margin levels in the industry. The opex rate dropped about 20 points to around 40%. Gross margins rose six points in the quarter to a very-high 82%. This rapid revenue growth drove huge margin expansion through economies of scale inherent to Pinterest’s highly scalable digital ad business model. This combination of multi-quarter-high user growth and multi-quarter-high unit revenue growth sparked 76% revenue growth for Pinterest in Q4 - the company’s single-best revenue growth rate since becoming a public company. That marks the company’s best ARPU growth rate since the third quarter of 2018. At the same time, ARPU growth dramatically accelerated to 29% in the quarter (up from 14% in Q3). Monthly active users rose 37% in the quarter, consistent with Covid-19 trends in Q2 (MAUs +39%) and in Q3 (+37%). Pinterest’s Blowout Earningsįrom head to toe, Pinterest’s fourth quarter numbers were strong. My numbers say that Pinterest stock will soar to $200 in the long run.
#PINS STOCK FREE#
Sign Up for Luke’s Innovative Hypergrowth Newsletter and Get Your Free Special Report.And, as that happens, PINS stock will keep pushing higher. As the company adds tons of new users and advertisers over the next several years, Pinterest’s revenues and profits will continue to soar. This company is still in the early stages of expanding its global reach and ramping up its advertising platform. From a price action perspective, some investors may think that the best has already happened.īut, from a fundamental perspective, the best is yet to come for Pinterest. I know Pinterest stock has soared from $10 to $80 over the past eleven months. Source: Nopparat Khokthong / īut, what is surprising is that this is just the beginning of the big rally in PINS stock.
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