PinterestPINS

might have started as a haven for mood board-makers, DIY maximalists, and chronic bookmarkers, but it’s hoping to secure Wall Street’s attention with a new pitch — actually making money. After a rocky summer, which brought disappointing earnings forecasts, the online scrapbook-style social platform has been rebuilding investor and analyst interest. Riverpark Capital’s Conrad van Tienhoven believes, “The reason Pinterest is getting all this new attention is that it potentially has massive tailwinds, but it’s not really expensive.”

Pin it to win it: Despite being a major player in social media with 522M monthly active users, the company has struggled to leverage its platform for profit. Pinterest’s average revenue per user — estimated at $6.85 — still lags behind social peers, leaving much to be desired. Investors have remained cautious, withPINS

down ~7% this year — underperforming the Global X Social Media ETF’sSOCL

9% rise. To address these challenges, the popular image-sharing platform has launched several strategic initiatives.

• Pinterest’s partnership with AmazonAMZN
  has helped the virtual pinboard boost its e-commerce offerings and use consumer data to improve the quality of its ad network.
• CEO Bill Ready noted, “Our monetization efforts are paying off… we’re gaining share of advertising budgets with some of the world’s largest brands.”

AI, Meet ROI

Bank of America believes third-party partnerships, a collaboration with Google, and new AI tools could be key drivers for the business — it forecasts $140M in partnership revenues for this year. Following in the footsteps of leaders like Google and Amazon, Pinterest has also been testing out generative AI tools with advertisers like Walgreens and Prada, which have seen a notable uptick in clickthrough rates and reduced costs per click.

• In early testing, advertisers who used Pinterest’s Promotions tools experienced a 12.7% rise in conversions compared to those using traditional ads.
• During alpha testing, most advertisers saw a minimum increase of 15% in their Return on Ad Spend (ROAS) using Pinterest Performance+ ROAS bidding.

Pins, profits, and progress: Pinterest has crafted a good story for investors, but doubts about its long-term growth potential might make it struggle to attract investors away from better-positioned competitors like Meta, which tout similar expansion opportunities and greater market dominance. Wisconsin Capital Management’s Tom Plumb noted, “It’s an additional leap of faith to buy Pinterest rather than Meta, and while I’m not saying it won’t work until it shows that its improvements are sustainable, we just have more comfort in Meta.”