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Pinterest: 3 reasons why the stock could (still) be a buy now!

Pinterest's stock has really been quite successful lately. Since the low point of the Corona crash alone, the shares have increased from 10.92 US dollars to the current price level of around 69.75 US dollars (January 15, 2020, which is decisive for all prices and fundamental key figures). That corresponds to more than a sixfold increase.

Does this mean that the Pinterest share is still a buy? If you ask me: yes, definitely ... but that's just my personal opinion. However, I have three exciting reasons for which you as an investor should possibly think about at least once.

Pinterest share: Winners win!

We Fools believe in one sentence: Winners win! What is behind this can actually be summarized quite simply: stocks that have already proven that their investment thesis has worked out often tend to continue to rise. In any case, this could apply to the Pinterest share.

If we stay with the last quarterly figures alone (which was acknowledged with a price increase of over 30%), we see that the growth story continues. Revenue for the quarter increased 58% to $ 443 million. The number of monthly active users also climbed by 37% to 442 million. A really strong operational performance with two key metrics.

With regard to both sales and the network, we can state that the Pinterest share still has very significant long-term potential. No question: the growth story can still be exhausted in the long term. Therefore: Winners win. In the case of the Pinterest share, that could be a possible conclusion.

Not expensive in terms of market value

A second aspect that speaks for the Pinterest share now is the fundamental valuation. To be fair: The price-to-sales ratio is currently almost 24, anything but cheap. A solid pinch of optimism may therefore generally be priced in. However, if the growth course continues rapidly, the valuation should be put into perspective in the medium to long term.

However, what speaks in favor of a continued favorable valuation is the current market capitalization. Pinterest currently has a market value of 43.1 billion US dollars. If you ask me, it's not that expensive. Especially not for a potentially leading global creative network that has a particularly attractive and innovative form of marketing. If you are looking for inspiration, you may be grateful for purchase ideas with which your own projects can be put into practice.

Doesn't this argument convince you? Then let's take a look at comparables: Facebook, the market leader, currently has a market value of 715 billion US dollars, Snap has a market capitalization of almost 75 billion US dollars. That shows me: Pinterest has catch-up potential here.

Pinterest: Monetization

Monetization also has catch-up potential. Pinterest makes most of its money with US users. This circle comes to average revenue per account of 3.85 US dollars. The international users, however, on an average of 0.21 US dollars. That's not even an eighteenth of what US users generate.

A discrepancy will remain, but it seems too big to me. On the basis of an international user group of 343 million active accounts and if Pinterest were to manage to achieve an average of 1 US dollar in sales per user, this would result in further sales potential of almost 271 million US dollars. That shows how many possibilities Pinterest has even at the current level. However, user growth is likely to continue.

Pinterest Share: A Hot Choice!

The Pinterest share is and will therefore remain a hot choice for me: the shares have increased massively, but this could only be a foretaste of an intact growth thesis. The stock market valuation leaves room for maneuver and there is still untapped potential operationally. For me, these are the reasons why I continue to rely on the Pinterest share.

The post Pinterest: 3 reasons why the stock could (still) be a buy now! appeared first on The Motley Fool Germany.

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Vincent owns shares in Pinterest. Randi Zuckerberg, a former head of market development and spokeswoman for Facebook and sister of CEO Mark Zuckerberg, sits on The Motley Fool's board of directors. The Motley Fool owns shares of and recommends Facebook and Pinterest.

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