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In April 2019, Pinterest went public on the New York Stock Exchange. The question for many bloggers is how does it impact their business? Now, as we move into 2020, it is worth reviewing Pinterest performance as it relates to stock performance and key metrics. Bloggers that use Pinterest need to understand the company’s focus and how that might change the platform in 2020.
- Overview of Views from Analysts
- Financial and Key Metrics Review for 2019
- 2020 Strategic Goals
Financial Analysts View of Pinterest Stock
There was a lot of buzz around the Pinterest IPO. Pinterest was dubbed a unicorn. Unicorn meaning Pinterest is a large company going public at roughly $14 Billion market capitalization. There are many financial analysts following Pinterest stock.
Pinterest stock price has been a roller coaster. The stock IPO price on April 18, 2019 was $23.75/share. The high in August 2019 was $36.83/share. The low in December 2019 was $17.39. After the recent earnings release in February 2020, the stock price is around $26/share.
So what happened. Simply….
Pinterest stumbled in mid-2019 with lower than expected results. The stock price tumbled and there were analysts questioning Pinterest’s ability to perform.
The 4th Quarter 2019 Pinterest performance results were above expectations and the stock jumped. The stock market is a fickle friend.
The general view of the Pinterest stock have not changed in the last year. Pinterest is still positioned for growth and Pinterest still has a long way to go in monetizing its international business. The basics Pros/Cons are below:
- Growth: Pinterest is position as a growth company. The number of people using Pinterest per month has doubled from 2016 to 2018.
- Monetization: The general consensus is Pinterest has the opportunity to improve the monetization of its product. This is considered a strong upside potential for Pinterest stock. It is also a concern of bloggers as to what it might cost the average blogger.
- Search Engine Domination: Google and Facebook are everywhere. Pinterest has a small slice of the search engine pie. It is frequently talked about as being a second tier player. The fear is Pinterest cannot compete and the behemoths will simply offer their versions of Pinterest. For example, Facebook is using the Instagram platform to start Instagram Collections.
- International Monetization: Pinterest has done well monetizing in the United States, but continues to struggle overseas. The question is how well will its current monetization model transfer to other countries?
What do the Financial Numbers indicate?
(sources for Section: Pinterest 2019 Q4 Press Release, 2019 Pinterest Earning Presentation, and Shareholder Letter 2019)
The Q4 results were impressive, especially after several missteps after going public.
It is important for bloggers to understand the key metrics as it gives insight into company’s goals and objectives.
For example, Pinterest needs to continually work on monetizing their platform. How a blogger uses that information can be a differentiator on the platform.
Pinterest Performance Review – Key Metrics
These are the metrics that Pinterest is reporting out to the street on as important. Again, this gives you insight into the company’s focus.
- Revenues for the entire 2019 grew 51% YOY (year over year).
- Annual Revenue broke the billion dollar mark.
Monthly Active Users
- Monthly Active Users (MAUs) were up 26% YoY to 335 Million (M)
- MAUs are growing faster internationally than in the US
Average Revenue Per User
- Average Revenue Per User (ARPUs) was up 21% YOY to $3.81
- International ARPU is significantly behind the US. Consider the financial potential for Pinterest if it could triple current international ARPU.
2019 Full Year Performance
(data below from Pinterest 2019 Q4 Press Release )
|Monthly Active Users||335M||88M||247M|
|Average Revenue Per User||$3.81||$12.07||$0.54|
2020 Pinterest Goal for Users
The vision in 2020 is different from 2019. 2019 was a year focused on gaining more users (see our Pinterest IPO Article for more information on 2019 vision). 2020 appears to be a year focused on monetization.
Ben Silbermann, Pinterest CEO and Co-founder. “In 2020, we continue to pursue our goal of making Pinterest the Internet’s home for inspiration by focusing on delivering relevant content, ads and shopping experiences so Pinners can easily go from inspiration to action.”
There are 4 Strategic Goals.
The conference call on February 6, 2020 was 46 minutes long. We would attach a link to the call, but the conference calls are typically deleted after a short time frame. During the call, there were 4 strategic goals that were discussed by Pinterest.
1. Making sure Pinterest is home to inspirational content
There were 3 key points of focus (a) make sure to continue showing relevant content to users, (b) having positive and inspirational content (fighting unsafe content),and (c) new innovative and creative formats (think videos).
2. Scaling the Ad business
The focus has been on small business ad business. 2020 will be a year focused on mid-size and international businesses. Pinterest discussed growing the number of ads and making the sure the ads are relevant.
There were a lot of questions on the conference call regarding growing the ad revenue, particularly internationally.
3. Helping Users See Value of Pinterest for Multiple Reasons in Their Lives
Basically, how does Pinterest retain active users? If you used Pinterest for planning your wedding, how does Pinterest keep you coming back after the wedding?
4. Making Pinterest More Shoppable
This is about taking inspiration to buying. Two items noted that are being worked on include the Verify Merchants Program (VMP) and Powered by Lens.
Pinterest performance and stated goals gives bloggers great insight into Pinterest’s vision for the future. This is a good thing, especially if you have any income tied to how your Pinterest account performs.
Pinterest performance in the Q4 2019 rebounded after a few soft quarters. The result was a significant uptick in its stock prices. The future seems to be bright for Pinterest.
Pinterest is heavily focusing on monetizing the platform, particularly focused on mid-size and international businesses. The analysts appear to be supportive of this strategic goal.
- Read what Pinterest management writes on its website.
- Follow the Pinterest stock (symbol: PINS) to understand the climate.
- Make your opinion known to Pinterest regarding any changes being considered. You are a stakeholder.
- Subscribe to my blog as we will continue to give updates as interesting information is disseminated through media and/or Pinterest.
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