In the social media investing world, Facebook, Twitter and Snapchat get all the buzz. But in 2020, Pinterest sharply outperformed them all.
This year, Pinterest stock is up almost 125 percent, comfortably outpacing Facebook’s gain of more than 25 percent and Twitter and Snap’s leaps of 40 and 60 percent respectively.
And some analysts say that, thanks to Apple’s latest look, the image-sharing platform has even more upside.
Thanks to Apple
The new iOS 14 release from the iPhone maker includes a folder-heavy update that makes it easier for iPhone home screens to be personalized. As a result, in recent weeks, there have been numerous reports of Pinterest downloads reaching records on the App Store, along with individuals tweeting screenshots of their latest home screens and citing Pinterest posts as inspiration.
Experts note that the uptick in Pinterest downloads after Apple launched iOS 14 and a sustained interest in the social media business could help increase its monetization rates internationally. Currently, the average revenue per user of Pinterest in the US is three times more than the revenue from an international user.
The new ‘Story Pins’ feature by Pinterest, which allows creators to post a mix of images, video, audio and text, might help the company attract more users, particularly Gen Z consumers (born between 1996 and 2015) who have shifted to Snapchat, Instagram owned by Facebook and TikTok, the video sharing app.
Nevertheless, Pinterest will still need to prove that it can be reliably profitable over a longer period. Since showing a profit in the fourth quarter of 2019, the business has lost money in the last two quarters.
But is hope that Pinterest might finally be turning a corner.
Analysts are currently predicting that a small profit for 2020 will be posted by Pinterest and that profits will rise in 2021. Moreover, after the company posted its second quarter results in late July, 20 of the 28 analysts who follow Pinterest have increased their price target on the stock.
Compared to the likes of Facebook and other tech and social networking giants including YouTube owner Google, Pinterest seems to benefit from the fact that it is still relatively small.
While most major tech companies have come under extreme pressure from the US and the antitrust authorities around the world, Pinterest can continue to be safe from the regulatory radar, with only 96 million monthly active users in the US and 321 million globally.