Pinterest, Inc. (PINS): A Bull Case Theory
We came across a bullish thesis on Pinterest, Inc. on Accrued Interest's Substack by Simeon McMillan. In this article, we will summarize the bulls' thesis on PINS. Pinterest, Inc.'s share was trading at $34.00 as of June 23rd. PINS's trailing and forward P/E were 12.50 and 19.01 respectively according to Yahoo Finance.
Photo by Szabo Viktor on Unsplash
Pinterest (PINS) is gaining attention as a potential standout in the social media space, offering compelling upside despite investor skepticism. While its revenue of $3.7 billion in 2024 is smaller than expected, Pinterest's niche positioning and unique user base provide an avenue for advertisers seeking alternatives to Meta and Google.
Analysts project ~15% annual revenue growth, though there are questions around the platform's ability to scale meaningfully beyond its current user ceiling. Pinterest reported $1 billion in EBITDA at a 28% margin in 2024, and analysts forecast moderate expansion to 33% by 2027. The stock's standout trait is its robust free cash flow profile—$1.2 billion is projected for 2025, reflecting over 90% conversion of EBITDA to FCF, a key metric for long-term compounding.
Valuation appears attractive, with Pinterest trading at 16x 2026E EPS and just 13x 2027E, despite a net-cash balance sheet. On an EV/FCF basis, the multiple is even lower—14x and under 12x for 2026 and 2027, respectively, suggesting discounted investor expectations. The prevailing market view seems to be that Pinterest has carved out a viable niche but lacks the product strength to materially gain share in the competitive ad tech space.
Yet if Pinterest meets its estimates and trades at a reasonable 19x multiple in 2027, the stock could reach $49, offering ~44% upside. The case hinges on its ability to deliver 15%+ revenue growth and 30%+ EBITDA margins, which would validate its position as a high-quality compounder overlooked by the market.
Previously, we covered a on Pinterest, Inc. by Dan in September 2024, which highlighted Gen Z-led user growth, its Amazon partnership, and intent-driven ad monetization. The company's stock price has appreciated by approximately 11.6% since our coverage. The thesis still stands as fundamentals remain strong. Simeon McMillan shares a similar view but emphasizes Pinterest's free cash flow strength and valuation discount.
Pinterest, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 86 hedge fund portfolios held PINS at the end of the first quarter, which was 73 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 have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None.
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