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In today’s post:
Is Pinterest the Next Meta? 🤔
This Merger’s a Money Printer 💰
The Mouse Just Got Mean 😠
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IS PINTEREST THE NEXT META? 🤔
Pinterest $PINS ( ▼ 1.76% ) isn’t usually the stock people brag about owning. It’s not flashy like Nvidia, or meme-y like GameStop. But here’s the thing: behind the curtain, Pinterest has quietly been rebuilding itself into a global ad powerhouse… and Wall Street hasn’t caught on yet.
We’re rating it a Buy, slapping on a $52 price target, and here’s why:
International ad growth is about to kick into gear.
AI monetization is driving better ad returns.
Margins are set to expand as Pinterest scales.
Let’s unpack how all of that fits together.
The Contrarian Angle Nobody’s Talking About
Pinterest stock is down about 30% from its highs. The market’s been giving it the side-eye. But what the bears call “weakness,” we call “hidden strength.”
Here’s what’s actually happening:
Revenue is up 17% year-over-year.
Ad impressions grew 55% in Q2.
That combo tells us Pinterest isn’t struggling — it’s aggressively grabbing market share overseas. The company’s leaning into “quantity over price” for now (more impressions, slightly lower rates). Once those international markets mature, that flips into serious operating leverage.
In plain English: they’re planting seeds today for profits tomorrow.
The Global Story Nobody’s Pricing In
Here’s the setup:
8 out of 10 Pinterest users live outside the U.S.
Yet, international revenue makes up only ~25% of total revenue.
See the gap? That’s the opportunity. Europe and “Rest of World” are where the next leg of growth comes from. And when those regions catch up in monetization, it’ll meaningfully boost both top and bottom lines.
That’s one reason our 12–24 month outlook for $PINS ( ▼ 1.76% ) is bullish.
Performance+: The Secret Weapon for SMB Ads
Pinterest’s new Performance+ program is the key short-term growth driver. It uses AI to help small and medium-sized businesses (SMBs) launch smarter ad campaigns with minimal effort.
Here’s what we’re modeling:
20% of trial users will convert into long-term advertisers.
The SMB advertiser base grows 5%.
Average SMB ad spend rises 10%.
How? Better AI matching, stronger click-through rates (CTR), and lower cost-per-click (CPC).
The result? Happier advertisers, fatter margins, and higher revenue per user.
Gross margins on ads could expand by 100–150 bps as these automated campaigns scale.
The Global Ad Boom (With a Short-Term Catch)
Pinterest isn’t just sitting in its corner of the internet anymore — it’s partnering up.
Integrations with Google, Amazon, and reseller partners like Aleph are set to accelerate international revenue growth by 30–45% year-over-year over the next 12 months.
The trade-off?
Expect some near-term eCPM dilution (down about 10–15% internationally, or 30–60 bps off the global average) as Pinterest ramps up in low-rate regions.
But that’s just growing pains. Once these regions mature, monetization will improve, margins will recover, and the payoff could be huge.
The biggest risks here are execution and local adoption. If Pinterest fumbles its integrations or fails to build regional relevance, that growth could stall. But if they deliver, the international side will unlock durable, compounding revenue.
AI Is Quietly Boosting EPS
AI isn’t just a buzzword here. It’s directly driving earnings growth.
We forecast:
FY25 EPS: $1.08
FY26 EPS: $2.20
That’s higher than Wall Street’s consensus of $2.13 because we’re modeling in AI-driven efficiency gains and increased advertiser stickiness.
Pinterest’s management is also tightening up expenses:
Stock-based compensation moderates from $400M → $350M by FY26.
Share count shrinks to ~400M via buybacks.
It’s a cleaner, leaner company with real EPS power coming online.
Valuing the Pin Board
We’re valuing Pinterest on forward earnings (P/E), not just vibes.
Here’s the math:
FY26 EPS: $2.20
Applied multiple: 26x
Target price: $52
Peer set includes Etsy, Alphabet, Meta, Reddit, Snap, and Wayfair — all players in discovery, digital ads, or e-commerce.
The group trades around 25.4x forward earnings, so we’re giving Pinterest a small premium for its international growth potential and margin upside.
That’s why we think $52 is justified and possibly conservative if AI execution goes smoothly.
Even if we’re being a bit too keen, the rest of Wall Street has a price target of $43.55 for the next 12 months which is still a massive 36.3% gain.
Wall streets average price target for the next 12 months is over 36% gains
What Could Go Wrong
Our Buy thesis depends on timely AI rollouts and international execution.
If Pinterest drags its feet, EPS growth could stall.
Here are the red flags to watch:
Regulatory heat: EU fines could reach up to 7% of revenue, forcing slower AI rollouts.
Execution risk: If AI-driven ROAS doesn’t improve as modeled, margin expansion stalls.
Multiple compression: If valuation drops 20% (to ~23.7x), the price target could fall from $52 to ~$42. (which is still ~36% up from current price and just in line with what Wall Street currently thinks)
We’re tracking three key metrics to protect our conviction:
Regulatory enforcement and fines
Compliance costs and rollout timelines
Actual ROAS results from generative AI campaigns
If those start trending the wrong way, we’ll reevaluate our stance.
The Bottom Line
Pinterest might not be the sexiest name in AI — but it’s quietly building one of the best risk/reward setups in digital ads right now.
You get:
AI exposure
International growth
Expanding margins
Reasonable downside protection
That combo doesn’t come cheap in this market, yet Pinterest is still flying under the radar. We’re bullish and keeping a close eye on it.
TL;DR:
Pinterest isn’t just mood boards anymore. It’s quietly becoming an AI ad machine.
Performance+ is turning small biz advertisers into high-ROAS addicts.
International growth is the real unlock — 80% of users, only 25% of revenue (for now).
EPS could jump to $2.20 by FY26, with AI and buybacks doing the heavy lifting.
Slap on a 26x multiple, and you get a $52 price target — with upside if AI keeps delivering.
Risks: EU regulators, AI rollout delays, and execution hiccups.
But for now? Pinterest is the rare mix of AI hype, real earnings, and global expansion — without the nosebleed valuation.
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