We came across a bullish thesis on Pinterest, Inc. (PINS) on Substack by Long-Term Pick. In this article, we will summarize the bulls’ thesis on PINS. Pinterest, Inc. (PINS)'s share was trading at $39.09 as of Feb 13^th. PINS’s trailing and forward P/E were 14.64 and 21.74 respectively according to Yahoo Finance.

Pinterest (PINS) continues to strengthen its position as a leading visual discovery and social commerce platform, delivering impressive user and financial growth. The company recently surpassed 550 million monthly active users (MAUs), with notable gains in the U.S. and Canada, demonstrating strong engagement trends. In Q4 2024, Pinterest achieved a significant milestone by generating over $1 billion in quarterly revenue for the first time, marking an 18% year-over-year increase. This performance was further highlighted by an over 50% surge in adjusted EBITDA, surpassing $1 billion, reflecting the company’s ability to scale profitably. A key driver of growth has been Pinterest’s successful AI integration, improving user experience and ad performance, leading to a 90% increase in clicks to advertisers. Additionally, the company posted GAAP net income profitability for the first time since 2021, reinforcing its financial resilience.

Despite these strong results, Pinterest faces some challenges. The softness in the food and beverage subsector of consumer packaged goods (CPG) impacted overall growth, and this headwind has yet to be fully resolved. Ad pricing declined 18% year-over-year due to a rise in ad impressions and a shift in the auction mix, creating some near-term revenue pressure. While user growth remains robust, improving the DAU to MAU ratio in mature markets remains an ongoing challenge. The company’s decision to forgo political advertising also limits potential revenue during election cycles. Additionally, while third-party partnerships have contributed to demand, their role may diminish as Pinterest expands its first-party business.

The fair price estimate for Pinterest is $52. Given the platform’s improving profitability, expanding user base, and AI-driven engagement, Pinterest presents a compelling long-term investment opportunity with significant upside potential.

Pinterest, Inc. (PINS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held PINS at the end of the third quarter which was 61 in the previous quarter. While we acknowledge the risk and potential of PINS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PINS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.