![\"Finviz](\"https:\/\/publish.finviz.com\/060225\/PINSd151973620i.png\")
<\/p>\nBoaty and I were looking at RDDT and PINS \u2013 PINS is actually a very good play:<\/p>\n
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\ud83d\udea2<\/span><\/span>\u00a0Pinterest delivered a\u00a0strong Q1 2025 performance<\/strong>\u00a0that showcased the platform\u2019s resilient business model and superior fundamentals compared to Reddit, making it the clear winner for investors seeking exposure to the social media advertising space without Reddit\u2019s excessive valuation and existential risks.<\/p>\n Revenue Beat<\/strong>: Pinterest reported\u00a0$855 million in Q1 revenue<\/strong>, representing impressive\u00a016% year-over-year growth<\/strong>\u00a0(17% on constant currency basis) and beating analyst expectations. This compares favorably to Reddit\u2019s $392.4 million quarterly revenue, demonstrating Pinterest\u2019s\u00a02.2x larger scale<\/strong>\u00a0and more mature monetization.<\/p>\n Earnings Miss with Context<\/strong>: Pinterest delivered\u00a0$0.23 adjusted EPS<\/strong>, missing the $0.26 consensus estimate by $0.03. However, this miss was primarily due to increased investment in AI and international expansion rather than fundamental business deterioration. More importantly, Pinterest achieved\u00a0positive net income of $8.9 million<\/strong>, a dramatic turnaround from the $24.8 million loss in Q1 2024.<\/p>\n User Growth Momentum<\/strong>: The platform reached a\u00a0record 570 million global monthly active users<\/strong>, up 10% year-over-year and beating expectations of 565 million. This user base is\u00a0significantly larger than Reddit\u2019s 108.1 million daily actives<\/strong>, providing much greater scale for advertiser reach.<\/p>\n Strong Margins<\/strong>: Pinterest maintained healthy\u00a0adjusted EBITDA of $172 million (20.1% margin)<\/strong>, demonstrating the platform\u2019s ability to generate substantial cash flows from its advertising model \u2013 a stark contrast to Reddit\u2019s razor-thin profitability in just its first profitable quarter.<\/p>\n Reasonable Multiples<\/strong>: At $31.11 per share, Pinterest trades at a\u00a0forward P\/E of 16x<\/strong>\u00a0compared to Reddit\u2019s astronomical\u00a059x forward P\/E<\/strong>. This represents a\u00a073% valuation discount<\/strong>\u00a0despite Pinterest\u2019s superior scale, profitability track record, and user engagement metrics2<\/a>3<\/a>.<\/p>\n Price-to-Sales Comparison<\/strong>: Pinterest\u2019s\u00a06.29x price-to-sales ratio<\/strong>\u00a0is significantly more reasonable than Reddit\u2019s\u00a025.3x revenue multiple<\/strong>. For context, Pinterest generates\u00a0$3.4 billion in annual revenue<\/strong>\u00a0compared to Reddit\u2019s\u00a0$1.6 billion run rate<\/strong>, yet trades at a fraction of the valuation premium2<\/a>.<\/p>\n Market Cap Reality Check<\/strong>: Pinterest\u2019s\u00a0$20.9 billion market cap<\/strong>\u00a0provides substantial upside potential, while Reddit\u2019s\u00a0$19 billion valuation<\/strong>\u00a0for a much smaller, less profitable business suggests limited room for appreciation without perfect execution2<\/a>.<\/p>\n Proven Profitability<\/strong>: Unlike Reddit\u2019s single quarter of profitability, Pinterest has demonstrated\u00a0consistent positive cash generation<\/strong>\u00a0with strong return on invested capital of\u00a07.13%<\/strong>\u00a0compared to Reddit\u2019s negative\u00a0-55% ROIC<\/strong>. This track record provides confidence in management\u2019s ability to deploy capital effectively5.<\/p>\n Geographic Diversification<\/strong>: Pinterest generates\u00a0$663 million from U.S.\/Canada<\/strong>\u00a0and\u00a0$147 million from Europe<\/strong>, showing successful international monetization. Reddit\u2019s heavy dependence on U.S. users creates concentration risk that Pinterest has already diversified away from10<\/a>.<\/p>\n Engagement Quality<\/strong>: Pinterest users demonstrate\u00a0higher commercial intent<\/strong>\u00a0with 46% more likely to trust advertised brands. The platform\u2019s visual discovery model naturally leads to purchase consideration, unlike Reddit\u2019s text-based discussions that don\u2019t directly drive commerce1<\/a>.<\/p>\n Q2 2025 Outlook<\/strong>: Pinterest guided Q2 revenue to\u00a0$960-980 million<\/strong>\u00a0(midpoint $970 million), representing continued double-digit growth and exceeding analyst expectations of $966 million. This guidance demonstrates confidence despite macro headwinds10<\/a>.<\/p>\n AI Investment Payoff<\/strong>: CEO Bill Ready emphasized that \u201cAI advancements are helping users take action and make more intentional shopping decisions,\u201d positioning Pinterest to benefit from rather than be disrupted by AI trends \u2013 unlike Reddit\u2019s vulnerability to Google\u2019s AI search changes1<\/a>.<\/p>\n International Expansion<\/strong>: The 82% growth in international markets provides a clear runway for continued expansion, while Reddit\u2019s growth story remains largely dependent on U.S. market penetration12<\/a>.<\/p>\n No Google Dependency<\/strong>: Pinterest\u2019s\u00a0visual discovery model<\/strong>\u00a0generates organic traffic and user engagement independent of search algorithms. Reddit\u2019s heavy reliance on Google search traffic creates existential risk as AI search evolves to provide direct answers rather than directing users to Reddit discussions.<\/p>\n Recession Resilience<\/strong>: Pinterest\u2019s use cases \u2013 home decoration, recipes, fashion inspiration, wedding planning \u2013 represent\u00a0non-discretionary lifestyle decisions<\/strong>\u00a0that continue during economic downturns. Reddit\u2019s advertising model faces direct pressure when marketing budgets get cut.<\/p>\n Content Moderation Simplicity<\/strong>: Pinterest\u2019s visual, inspiration-focused content creates fewer moderation challenges than Reddit\u2019s text-based discussions on controversial topics. This reduces regulatory risk and advertiser brand safety concerns.<\/p>\n While not the primary investment thesis, the potential TikTok ban represents\u00a0significant upside optionality<\/strong>\u00a0for Pinterest. As users seek visual content discovery alternatives, Pinterest\u2019s\u00a0shopping integration and creator tools<\/strong>\u00a0position it as the natural beneficiary for both users and advertisers migrating from TikTok\u2019s platform.<\/p>\n The company\u2019s\u00a0\u201cTry On\u201d features for beauty products<\/strong>\u00a0and\u00a0direct shopping capabilities<\/strong>\u00a0make it the closest substitute for TikTok\u2019s social commerce functionality, potentially accelerating user acquisition and engagement metrics9<\/a>.<\/p>\n Rating<\/strong>:\u00a0STRONG BUY<\/strong>\u00a0for investors seeking social media exposure with reasonable risk\/reward Position Sizing<\/strong>: Pinterest warrants a\u00a04-5% portfolio allocation<\/strong>\u00a0compared to Reddit\u2019s maximum 2-3% recommendation, given the superior risk-adjusted return profile and reasonable valuation entry point.<\/p>\n Near-Term Drivers<\/strong>:<\/p>\n Medium-Term Opportunities<\/strong>:<\/p>\n Pinterest represents everything investors want from the social media advertising space \u2013\u00a0proven profitability, reasonable valuation, defensive characteristics, and clear growth catalysts<\/strong>\u00a0\u2013 without the execution risks and valuation extremes that make Reddit a speculative bet.<\/p>\n The\u00a016x forward P\/E vs. Reddit\u2019s 59x<\/strong>\u00a0tells the entire story: Pinterest offers similar growth exposure at a\u00a073% valuation discount<\/strong>\u00a0with superior fundamentals and a longer track record of profitable operations. While Reddit trades on potential and promises, Pinterest delivers actual results with a clear path to continued expansion.<\/p>\n For investors seeking Reddit-like exposure<\/strong>: Pinterest provides the same advertising-driven growth story with\u00a0570 million users vs. Reddit\u2019s 108 million<\/strong>,\u00a0$3.4 billion revenue vs. $1.6 billion<\/strong>, and\u00a0proven profitability vs. one-quarter experiment<\/strong>\u00a0\u2013 all at a massive valuation discount.<\/p>\n The choice is clear: Pinterest offers\u00a0better fundamentals, superior scale, reasonable valuation, and lower risk<\/strong>\u00a0while maintaining comparable upside potential. It\u2019s the smart way to play the social media advertising recovery without betting the farm on Reddit\u2019s execution at bubble valuations.<\/p>\n For PINS in the LTP, we like:<\/strong><\/span><\/p>\n That\u2019s net $9,600 on the $30,000 spread with $20,400 (212%) upside potential in 18 months and, of course, keep in mind in new portfolios we always leave room to double down or adjust our positions.<\/strong><\/span><\/p>\n Our commitment here is to own $39,600 worth of PINS <\/strong>(assuming we\u2019re dumb enough to lose it all and get assigned) and the LTP has 10, $100,000 allocation blocks <\/strong>($1M buying power) so we\u2019re using 40% of one on this trade.<\/strong><\/p>\n If PINS drops down to $24 again, we\u2019d own $6,000 on the short puts and let\u2019s say we had to spend $5 <\/strong>($12,500) to roll the 2027 $25 calls to the $15s. That would put us $24,000 in the money for net $22,100 and then we would sell new short puts to drop us back down \u2013 very survivable\u2026.<\/strong><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Boaty and I were looking at RDDT and PINS \u2013 PINS is actually a very good play: \ud83d\udea2\u00a0Pinterest delivered a\u00a0strong Q1 2025 performance\u00a0that showcased the platform\u2019s resilient business model and superior fundamentals compared to Reddit, making it the clear winner for investors seeking exposure to the social media advertising space without Reddit\u2019s excessive valuation and […]<\/p>\n","protected":false},"author":8,"featured_media":12827134,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26305],"tags":[],"class_list":{"0":"post-12827133","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-trades"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12827133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=12827133"}],"version-history":[{"count":1,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12827133\/revisions"}],"predecessor-version":[{"id":12827135,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12827133\/revisions\/12827135"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media\/12827134"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=12827133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=12827133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=12827133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Q1 2025 Earnings Performance \u2013 Solid Execution Despite Miss<\/strong><\/h2>\n
Valuation Advantage \u2013 The Key Differentiator<\/strong><\/h2>\n
Superior Business Fundamentals<\/strong><\/h2>\n
Forward Guidance and Growth Trajectory<\/strong><\/h2>\n
Risk Profile Comparison \u2013 Pinterest\u2019s Defensive Advantages<\/strong><\/h2>\n
The TikTok Ban Bonus Opportunity<\/strong><\/h2>\n
Investment Recommendation and Valuation Target<\/strong><\/h2>\n
\nTarget Price<\/strong>: Based on Pinterest\u2019s\u00a0$3.4 billion revenue run rate<\/strong>\u00a0and applying a conservative\u00a08x revenue multiple<\/strong>\u00a0(half of Reddit\u2019s current 16x), Pinterest should trade at\u00a0$130+ per share<\/strong>, representing\u00a0320% upside<\/strong>\u00a0from current levels.<\/p>\nKey Catalysts and Timeline<\/strong><\/h2>\n
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Bottom Line Assessment<\/strong><\/h2>\n
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![\"Finviz](\"https:\/\/publish.finviz.com\/060225\/PINSw153070069i.png\")
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