Should you buy Pinterest stock? With a $13.7 billion market value, this social media network is a force to be reckoned with. And by the looks of it, they’re not going anywhere any time soon. With that in mind, if you want to buy stock on Pinterest, you will want to keep reading. This is one stock to take a hard look at.
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Can I Buy Pinterest Stock Today?
Can you buy Pinterest stock today? The good news is yes! Pinterest is a publicly traded stock on the major exchanges. The other question, however, would be, should you buy Pinterest stock today? That’s where reading more here can help to answer that question.
Founded in 2010, Pinterest is an image-sharing social media site. At the same time, users can collect links and create virtual pinboards based on their interests.
With 60+ boards, I’m a self-proclaimed interest junkie with topics from cooking to my wedding (FYI – I’m not engaged, nor is there a prince charming in my life, but hey, I like to plan); my planning options are endless.
Pinterest fulfills my need to organize my life into neat boxes neurotically, so thank you! Maybe Pinterest stock would be a good buy for me now that I think about it.
However, I need to make sure of it. Hence, I am taking the free online trading courses offered by the Bullish Bears. But should you buy Pinterest stock?
Fun Facts About Pinterest
- Monthly Users: 335 million +
- Total Number Pins: 200 billion
- More than 14 million articles get pinned each day
- Retailers can reach 144.5 million people without advertising
- Pinterest generated 1.03 billion U.S. dollars in advertising (2019).
- Shares at their IPO on April 18, 2019, went for \$19 each.
- Q4 2019 global revenue was $400 million, with 46% growth year-over-year.
- 2019 revenue grew 51% year over year to $1,143 million.
Pinterest Stock Price on April 8?
Shares of Pinterest (NYSE: PINS) gapped 12% on April 8th. I suspect, and most would agree, it was due to preliminary first-quarter earnings results.
In addition to soaring share prices, we have rising usage as well. I must add that this comes as no surprise since we’re stuck at home.
CEO Ben Silbermann said that engagement on the platform is soaring to record levels. Many Pinners are looking for ideas and projects while they stay at home.
Let's Talk Earnings
Should you buy Pinterest stock? For most publicly traded companies, earnings are reported four times a year. To say these quarterly reports are highly anticipated is a gross understatement.
They are, in fact, the bread and butter of many investors. Depending on how the numbers shape up, they cause investors to bid up the stock’s price or punch it down.
For better or for worse, companies are judged by their ability to beat market expectations and analysts’ forecasts. All eyes are on whether or not the company “hit the bullseye.”
In other words, they’re judged on whether they hit the Wall Street analysts‘ consensus estimates. This knowledge is valuable as it helps investors navigate the tumultuous quarterly earnings.
Without hesitation, I can tell you a company’s ability to hit earnings estimates is vital to the price of its stock. Typically, when a company exceeds expectations, they’re rewarded with an increase in its share price.
It seems like a no-brainer to me. However, the stock price can plummet if a company falls short or meets expectations.
Beating earnings estimates tells us something about a stock’s general well-being. Any company that routinely exceeds expectations quarter after quarter is probably doing something right.
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Is Pinterest Stock a Good Buy?
Should you buy Pinterest stock? Looking at the chart, I would say yes, but wait for a direction. It’s trading right on the 9ema but with indecision candles. Since I like to use the nine ema as my entry point, I’d wait until the price decides if it will be bullish or bearish, as it’s indecisive.
The earnings report will be released on January 31, 2024. If you didn’t already know, the earnings season is one of the market’s most anticipated points during the financial year.
We saw the price of PINS stock gap down for about a week before moving up. It’s still heading up to this point.
Pinterest (PINS) was expected to deliver a year-over-year increase in earnings on higher revenues. Pinterest expects revenue for the first quarter to be “$269 million to $272 million.”
However, they didn’t offer an earnings outlook for the quarter. Analysts expect a loss of $49.6 million, or 8 cents a share, representing a year-over-year change of +75%.
On a positive note, the company ended the first quarter with approximately \$1.7 billion in cash and marketable securities. And with no financial debt and an untrapped $500 million revolving credit facility.
Did Pinterest Have a Earnings Surprise?
I know I said above that hitting or missing earnings can be why a stock moves higher or lower. But it’s not the only reason.
Many stocks lose ground due to unforeseen circumstances or catalysts – COVID-19, anyone? Similarly, many stocks gain despite an earnings miss.
For these reasons, it’s essential investors look at the whole picture (i.e., company fundamentals) before going long (or short). Therefore, should you buy Pinterest stock?
Somebody Knew Something
The market is always trying to tell us a story; it might not always be directly, but in many cases, it whispers. Those of you in the options arena might want to listen to the whispers.
On April 24, the May 8, 2020, $16.50 call option had some of the highest implied volatility of all equity options that day.
Let me tell you why this is important: Implied volatility shows you how much the market is expected to move in the future. Now, which direction, up or down, we do not know.
An option contract(s) with high implied volatility suggests a few things. Firstly, investors in the underlying stocks expect a big price move in one direction.
Alternatively, it could also mean a big event is coming up that could cause the stocks to rally or drastically sell off. If you’re wondering if you should buy Pinterest stock, look at the options chain.
Volatility in Pinterest Call Options
So, how do we interpret the extreme volatility in Pinterest call options? Clearly, options traders were expecting a big move for Pinterest shares.
All of this is great but, which direction would it have move? To do this, you need to look at the whole picture, the companies fundamentals included.
If you prefer to buy shares, make sure you know how to buy shares of stock.
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Pinterest Stock Analysts
Should you buy Pinterest stock? They currently carry a Zacks Rank of #1 (Buy). They believe that Pinterest stock is expecting above-average returns and earnings next week.
Given how analysts felt about Pinterest and its huge implied volatility, it could have meant something was brewing. Often, traders look for options with high implied volatility to sell the premium.
Most certainly, this is a strategy many experienced traders use because it captures time decay. The hope with this approach is that the underlying stock doesn’t move as much as initially expected at expiration.
PINS stock has been rallying since COVID-19, and the rally is far from over. Pinterest is doing something very important: improving the user interface while expanding advertising and e-commerce capabilities.
With this in mind, they hope to lay the foundation for significant, sustained revenue growth. Currently, Pinterest is shaping up a lot more like Instagram than Twitter.
What's Happening Now?
Shares of the digital pinboard and shopping tool company had gained 35.66% in April. Here’s another striking example to put things in perspective: Pinterest’s gains outpaced the Computer and Technology sector’s gain of 13.35% and the S&P 500’s gain of 16.09% in that same period.
On the contrary, Pinterest pulled its full-year outlook in the face of the ongoing COVID-19 pandemic and said its chief operating officer, Françoise Brougher, is leaving the company.
In a statement by Pinterest, they indicated they are “currently not in a position to forecast the expected impact of COVID-19 on its financial and operating results for the remainder of 2020”.
The company said first-quarter revenues were meeting its expectations until the middle of March, “when we began to see a sharp deceleration.” All of this is no surprise, considering we are in a pandemic. I would also consider keeping your eye on up-and-comer platforms like TikTok and Clubhouse.
Final Thoughts: Pinterest Stock
In sum, what have we learned? First: with a Zacks rating of 1 (buy). However, the week before earnings chart shows indecision near a high while riding the 9ema. So a direction hasn’t been decided by the market yet. Therefore, you may want to wait to see where PINS is headed.
If you’re willing to take a risk, buy while the stick rides the 9. But be aware that earnings could see a price drop significantly.
With this in mind, with any stock you purchase, you don’t have to limit yourself to cheaper penny stocks. If you think Pinterest is too expensive at $37, let me tell you, it’s not. You can easily control 100 shares in one option contract.
Options don’t have to be scary; they are less risky than buying shares outright. Check out our high-powered yet straightforward approach to secure winners. In addition to impressive profit potential, options can reduce your risk.
Now is the time to start; click here for our free options trading course. Happy trading!
Frequently Asked Questions
Pinterest stock is currently a BUY. The Zack's rating is a 1. They believe earnings will shatter expectations and the stock will continue to rise.
Pinterest is currently not a dividend paying stock. That doesn't mean it will stay that way. We could see it change in the future. But for now it's a growth stock.
While no one can predict the future, Pinterest stock is seen as a growth stock. Both its earnings and revenue are expected to increase per annum.
The most recent long-term forecast predicts that Pinterest price will reach $40 by year-end 2024 and $50 by mid-year 2025.
Thanks to Pinterest’s unique business model, PINS shares have risen 26.9% in the past 12 months. Earnings projections for the current fiscal year and the next fiscal year have risen 41.9%, and 27.3%, respectively, since November 2022, suggesting strong intrinsic growth potential.
