Pinterest is my best social media stock right now
Ssocial media stocks are benefiting from ad spending that is increasingly turning to digital channels. Pinterest (NYSE: PINS) claims hundreds of millions of monthly visitors to its platform, and marketers are willing to pay for their attention. In this segment of “The Five” recorded on December 14, Connor Allen, Fool.com contributor, explains why Pinterest is his favorite social media.
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Connor Allen: I also have a choice of digital advertising on Pinterest. But it’s also a social media choice because Pinterest is a form of social media and digital advertising. Pinterest is a business that is basically your one stop shop for creative ideas. If you buy a house, if you expand your house, you walk into an apartment and you wonder how to decorate or what you should add to it. Where does everyone go, everyone goes on Pinterest and there’s really nothing else that looks like Pinterest. They are only there for what they do exactly.
They make money, not from their users, but they collect data. They target users with advertisers. They collect money from digital advertisers who try to reach all the users they have. They have a very good brand. Like I said earlier, there really isn’t anyone else doing what they’re doing. They also experienced fairly strong growth in the number of users until the last quarters. The past two quarters haven’t looked very good for Pinterest when it comes to user growth. Much of that was probably a demand that has been pushed through the pandemic over the past few years.
It’s crazy to even say the pandemic has been around for a few years now because I guess it almost is. But some of the growth opportunities they have are partnering with Shopify (NASDAQ: SHOP). We have yet to see the effects of what this partnership will be. I can’t wait to see what that might mean in the future. But another growth opportunity for them is their international space in which they worked. Most of their users are international. Yet the income they collect is when they are national. Home users, they collect around four dollars per user, its average income per user, ARPU.
Then, international users, they collect around a quarter per international user. This data is a bit older and may have changed in the last quarter, don’t know. But if they can increase the monetization, even if they are growing slower like they’ve been doing in the last few quarters, but they can increase the monetization of international users, I think that could be a pretty exciting stock. for the future of social media and digital. The advertisement. It’s my choice.
Connor Allen is the owner of Pinterest. Parkev Tatevosian has no position in the mentioned stocks. The Motley Fool owns and recommends Pinterest. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.