Pinterest (NYSE:PINS) is up 18.7% in post-market trading after its Q4 2024 earnings report delivered solid results. There are still some things to consider before you jump in and buy the stock. Here’s what you need to know:
Pinterest reported $1.15 billion in revenue, up 18% year-over-year, and this marked the company’s first billion-dollar quarter. Moreover, its global monthly active user count hit a record of 553 million after growing 11% year-over-year driven by Gen Z adoption.
GAAP net income increased to $1.85 billion and was inflated by a $1.6 billion tax benefit. Adjusted EBITDA also rose 28% year-over-year to $471 million and margins expanded to 41%. FCF reached $940 million for all of 2024, up 55% year-over-year.
All these numbers are stellar for a platform that was considered to be dying or already dead just a year ago.
Pinterest guides for Q1 revenue between $837 million to $852 million and an adjusted EBITDA of $155 million to $170 million. The long-term strategy here is to focus on AI-powered ads and shoppable content to boost lower-funnel advertising.
Pinterest also needs to revive the platform and attract more Gen-Z users if it is to survive in the long run. The platform is still niche and not very well known, at least not among men since 70% of the platform’s users are women.
PINS stock is still down considerably from its peak prices and is trading near pre-COVID prices. This is while the company has shown that it is driving a revival of the platform with rising ad revenue and a growing user base.
You’re paying about 24 times forward earnings, but if it keeps outperforming in the coming quarters, it could gain a lot more. On top of that, it has $1.1 billion in cash to fund more growth.
If you think ad spending will continue to go up, PINS stock is a Buy for the long run.
