Buy Pinterest Stock Pre-Earnings Based on Attractive Valuation

3 months ago

Parkev Tatevosian, CFA

"I've felt this year that the risk versus reward is very worthwhile. And not only did I rate Pinterest as one of the best stocks to buy, but I bought Pinterest stock for my own portfolio a few weeks ago. And then when I look at Pinterest on a forward price to earnings ratio, it's trading at a forward PE of 18, which is less than the average stock in the S&P 500, which is trading at a forward PE of around 23 to 25. So Pinterest is below even that while it's growing revenue at 20%, its profits are expanding faster, its cash flows are expanding faster, it's operating in the advertising industry, which is one of my favorite industries because of the growth potential for decades or centuries actually. And it's just the scale over $1 trillion in expected spending on advertising globally in 2026 are the early estimates for the figures. So risk versus reward, I like Pinterest and this stock is undervalued enough where I think it does make sense that you can buy before the company announces earnings. But remember, an earnings release creates increasing volatility and the share price could move much larger than it typically moves on a regular trading day."

The speaker explains that despite short-term volatility risk ahead of earnings, Pinterest trade is compelling due to its significantly undervalued price relative to an intrinsic value of over $87 compared to a current market price of $33, supported by favorable forward PE and strong revenue metrics.

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