I’ve never been what you could call an active user of social media.
Apps such as Pinterest (NYSE:PINS) always seemed like something someone else would use, someone more creative than me. However, as I’ve watched Pinterest’s use of artificial intelligence grow the number of objects Lens — the app’s visual search tool — could identify, I’ve become a big believer in Pinterest stock.
Visually, I think PINS stock is a perfect 10. Here’s why:
Mobile E-Commerce Ideal for Pinterest
I went to high school with a friend who became a dentist by vocation. But he made a living as an entrepreneur and real estate investor. Even in university, he would drive by a property that looked interesting and enter the realtor’s details into the portable tape recorder he carried in his car precisely to jot this information down.
When he got home, he would immediately call the realtor to get more details.
I didn’t know it at the time, but that was the precursor to Pinterest or Instagram.
I haven’t seen my friend in years, but I’m sure he’s still jotting down a realtor’s details when he sees a new property. Only now, those details come in the way of a photo rather than a tape recording.
That’s the beauty of Pinterest.
If there were a better way for a company to tell its story than through a bunch of Pins on Pinterest, I’d love to know it. Lens can now identify more than 2.5 billion objects across home and fashion Pins, almost double the number that Google Lens could identify.
The phrase, “a picture paints a thousand words comes to mind.”
On September 17, Pinterest announced that it would begin incorporating shoppable Pins into its search results. This means that you could be out somewhere, take a picture of a product in a store window, and up would pop the product with pricing and the ability to order on the spot.
Now, I’ve never bought anything through Pinterest, but I imagine it’s only a matter of time. And when Pinterest gets me as a shopper, the sky’s the limit for the brands that work with it. Because if I’m buying, the whole world probably is too.
Interestingly, something like 80% of Pinterest users starts with a visual search when looking for a particular product or service.
Chasing the Next Great Product
Pinterest’s head of global strategy and marketing, CPG, Arthur Sevilla, recently wrote a blog post about consumer product companies getting through to consumers when launching new products. The headline read, “People on Pinterest are more likely to try new CPG products.”
Sevilla went on to suggest that “Pinterest households were 29% more likely to try a new product within the first 10 months of launch than non-Pinner households,” according to new research from Oracle (NYSE:ORCL) Data Cloud.
“Our research shows that people on Pinterest are more likely to try new CPG products,” said Megan Margraff, senior director at Client Analytics for Oracle Data Cloud. “This study adds to the evidence that Pinterest is a platform of exploration and inspiration, and it attracts people eager for new experiences.”
We are so inundated with information today that it’s become vital for consumer brand marketers to utilize every tool in their toolkit for turning those looking into buyers.
It’s so much easier converting someone through visuals than words. Pinterest is a natural platform for brands of all sizes.
The Bottom Line on Pinterest Stock
My InvestorPlace colleague Luke Lango recently suggested that Pinterest’s solid fundamentals should take PINS stock to $35 over the next few quarters.
More importantly, Luke goes on to suggest that Pinterest is in the early days of its ad business, and yet, its pathway to profitability has already been established.
In July, I argued that Pinterest stock was a better buy than Snap (NYSE:SNAP) because its pathway to profitability was more straightforward. With 300 million monthly active users and growing, consumer brands will continue to migrate to Pinterest to break through the online noise.
Furthermore, as the company continues to execute its business strategy in both the U.S. and internationally, its average revenue per user will continue to rise. When Pinterest’s international ARPU is above $1.00, you can be sure it will be making money on a non-GAAP basis.
For those holding for three to five years, Pinterest under $30 is a buy, in my books.
At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
