Written by
Summary
- After long being resident PINS permabulls, we've used the last many months to do some serious stress-testing of our thesis, prompted by decelerating growth and declining engagement.
- The business is going through a tough patch, but it shouldn't be left for dead. The stock isn't investable at a full position right now, but we remain fundamentally optimistic.
- Things could get rougher this year. We're modeling a relatively large 1H deceleration in revenues (below consensus) while management is guiding 40% opex growth. Estimates are likely too high.
- While we expect choppiness and turbulence this year, we continue to like the vision management has for the business. Creating a full-funnel social commerce platform is something that has serious potential, and management is pushing to get there. We're bulls on PINS in spite of the uncertain environment.
- Restarting coverage of PINS. Rating set at Buy. Base Case PT set at $39. Bear Case PT set at $14.50. Bull Case PT set at $55.
Premise - We're Long-Term Bulls On Pinterest In Spite of An Uncertain to Outright Bearish Short-Term Picture
Over the last six to nine months, we decided to take a step back on covering Pinterest (NYSE:PINS) and let the volatility play out in the stock. In returning to coverage, our conclusion is that while the dust hasn't settled yet, and the stock likely hasn't bottomed yet, we would be happy to be long-term shareholders.
In the short term, there are quite a few headwinds afflicting the...
Read Full Story: https://seekingalpha.com/article/4501612-pinterest-stock-optimists-in-an-environment-rife-with-uncertainty
Your content is great. However, if any of the content contained herein violates any rights of yours, including those of copyright, please contact us immediately by e-mail at media[@]kissrpr.com.
