Why Pinterest is my favorite social media stock

When it comes to social media actions, Pinterest (NYSE: PINS) is an interesting question. It is not the most important, nor the most advanced in terms of monetization, but it offers very interesting opportunities for growth in the years to come. In this Fool live Video clip, recorded May 14Fool.com contributor Jason Hall explains why Pinterest is his favorite social media action in the market.

Jason Hall: Yep, so Pinterest has sort of become my favorite social media platform, especially as an investor, for several reasons. If you look at the slower growth in its user acquisition, the company grew its users by around 30% last year, with the majority growing internationally. US growth has slowed. It’s going to slow down even more in 2021, but I think it’s part of the healthy phase of growing the business. The most exciting thing for me about it is that I think it’s the best social media platform when it comes to monetization. It is already pointed to the people who engage in it on a transactional basis. If you are looking to make cool cupcakes for your kid’s birthday party, you are looking to build a bed for your kid, you are looking for recipes, you are looking for a way to make a cool gift for your child spouse, there is all of these things, and when you are looking to do these things, you have to buy the things to do it. It’s really integrated so that the platform can do that. You look at his ARPU, the average revenue per user, he has about 500 million users around the world. Many of them are outside of the United States. Its international average revenue per user is around $ 0.26. You compare this to Facebook. Facebook, I think their average ARPU is getting close to or around $ 10, that’s significantly higher. The average revenue per user of Pinterest in the United States is still less than $ 4. There is enormous leeway to grow its monetization where it is. It’s not a platform that requires a ton of user growth to establish itself as a true high-yield platform. I think they will continue to increase these metrics and that will work great for long term investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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