Pinterest (NYSE:PINS) rallied a solid 36% last Friday, July 31, when it posted strong user growth. Short interest, at 7.2%, may add buying pressure on the stock. Just how fast is it growing?
Pinterest reported global monthly active users topped 416 million. It reported revenue of $232 million from the U.S. Although average revenue per user fell 21% to 70 cents, losses narrowed to $33.9 million (adjusted EBITDA). Buying momentum may continue for Pinterest stock as Twitter (NYSE:TWTR) profits weaken and uncertainties in TikTok’s future in the U.S. continue.
Pinterest is also a more compelling destination than Snap (NYSE:SNAP) or Twitter. The growing user base suggests that the platform is monetizable. The company will eventually post profit growth in the quarters ahead. User engagement is up sharply from last year because visitors are establishing new habits.
Due to COVID-19, people are exploring the site and giving it a chance. CEO Ben Silbermann said, "many of our core use cases around making the home more livable, personal well-being and fitness does continue to be themes." User growth is especially high from people under the age of 25. This is the sweet spot for advertisers.
After advertisers boycott Twitter, Facebook (NASDAQ:FB), and Instagram in July, the big companies may explore the prospects of advertising on Pinterest instead.
Wait for PINS stock to dip before considering a position.
