Pinterest Stock Looks Undervalued

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Pinterest Stock Looks Undervalued

Pinterest Stock Looks Undervalued

Pinterest had a very volatile year in the stock market. The Q4 earnings report was not so good, and it almost crashed the stock back in February. However, the Pinterest stock has since managed to bounce back after a strong Q1 report.

The Q1 report revealed a 13% increase in revenue from the US and Canadian markets. That's a lot higher than 9% growth seen in Q4. Similarly, the revenue from the European market also jumped by 27% during the same period.

Pinterest's Monthly Active Users Increased By 11%

The monthly active users of Pinterest also increased by 11% and were nearly 631 million. So, that's also a good sign and shows that Pinterest is still a relevant name in the realm of social media.

The most important metric is the average revenue per user, which has jumped up to $1.68. Once again, that's a solid number and highlights that Pinterest is heading in the right direction.

The EBITDA of Pinterest also climbed by 20% y/y and reached $207 million. That's a very solid number and highlights that Pinterest is now profitable.

Looking ahead, the Q2 revenue of Pinterest will be around $1.13 billion - $1.15 billion. This means the company is projecting a growth of 14% - 16% y/y.

There's no doubt that the Q1 results of Pinterest are very good and show that it is doing well despite the headwinds. According to analysts, the company is also trying to expand its customer base of advertisers. If Pinterest can manage that, it would further fuel the growth.

The Pinterest stock also looks cheap as its forward P/E is only 10.5. When we consider the attractive valuation and the growth trajectory, it becomes clear that Pinterest is a must-buy stock.

In fact, the forward P/E of Pinterest makes it a much better option than most other overvalued tech stocks. And the attractive P/E means there's still enough room for more upside in the coming quarters.

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