By summer, Pinterest will be back to adding 10+ million new users every quarter.
Pins stock forecast crack#
This is a cohort that Pinterest has failed to meaningfully crack yet but which, if Pinterest does crack, will provide a long runway for user growth over the next few years.
Plus, Pinterest is adding multiple new features - like Story Pins, on-platform shopping, interactive videos, and Shopify integrations - which are collectively drawing in more and more Gen Z users.Pinterest is the place to do all of those things. They are still going to look for new outfits to wear, find inspiration for where to go on vacation, seek new workout routines, and share cooking recipes. People are still going to remodel their homes.Pinterest is a social commerce platform with a wide array of durable value props that, yes, were exceptionally valuable during the pandemic, but will remain very valuable after the pandemic leaves, too.We aren’t concerned about PINS stock at all, because we think that slowing user growth is ephemeral and that, while it lasts, it will be offset by accelerating ARPU growth.PINS stock dropped big on that news, because user growth is the centerpiece of a social media company’s growth narrative.
Management expects this consumer behavior normalization to act as a headwind for user growth over the next few months, and is actually guiding for the platform to add just a few million new users in Q2, versus 19 million new users in Q1.What has also happened since mid-March? The world has normalized, and consumers have started to go outside.But management said that since mid-March, the platform’s user growth rate has slowed significantly.Adjusted EBITDA margins expanded a jaw-dropping 37 percentage points. The expense rate compressed 31 percentage points. Pinterest’s first-quarter numbers were great.Pinterest Earnings: Q1 Numbers Killed, User Growth Not So Much
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