Pinterest(NYSE: PINS ) Stocks are not doing well. The company’s shares have fallen 30% this year alone and 40% in the past 12 months. This is partly due to the impact of the tariffs on Pinterest’s financial results. Last year, the social media specialist’s revenue fell due to demand from major retailers to advertise on its platform – which was particularly affected by heavy imported products – as they cut marketing costs to cut costs and maintain their margins. Although this is a real issue for Pinterest, there are better reasons to buy the stock and hold it for the long term. Let’s consider three of them.
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The digital advertising market is competitive, with many social media websites and apps (and platforms outside of this space) where retailers can target potential customers. Pinterest is not the biggest among them, but it has some advantages that set it apart. Pinterest offers a different experience than most of its peers because of its visual focus. The Company’s platform is not intended for separate news, discussions, or discussions about distribution issues. Instead, it helps to unleash the creativity of its users through a vast library of images.
This also makes it the best advertising platform. Pinterest users are on the website because they are involved in some creative activity and are looking for inspiration. It can be anything from an outfit to how to arrange a room, or even planning a wedding – the bottom line is that they often just need inspiration. They need to purchase various items to turn their visions into reality. This desire is one of the things that makes advertising on Pinterest so interesting. The company’s focus means it can join other social media giants.
Pinterest has a deep ecosystem of users that continues to grow, even as it faces headwinds. The company ended the fourth quarter with 619 million monthly active users (MAUs), an increase of 12% year-over-year and an all-time record.
Pinterest has created a network effect. More users on this platform means a larger photo library and other offerings, which boost discovery, engagement, and ad sales. The cycle continues as the company’s deep content library and engagement help improve its recommendation algorithm. This is a major strength that can help Pinterest remain the leading platform in the social media industry for a long time.
Pinterest’s 2025 financial results weren’t as strong as expected, but they weren’t completely terrible either. The company’s revenue rose 16% year over year to $4.2 billion, while its adjusted net income rose 22% to $1.1 billion. And just as importantly, there are clearly areas where Pinterest can grow in the long term. Consider the company’s average revenue per user (ARPU). That metric came in at $7.21 for the year, up 4% year over year. But here’s where it gets interesting: ARPU in the US and Canada was $30.84.
In Europe, it was $5.12, and in the rest of the world, it was only $0.83. The good news is that ARPU outside of North America is growing very fast, and there is still a huge opportunity here. As management said on the company’s third-quarter earnings conference call, they are now exporting the same strategy that made Pinterest so successful with customers in international territories in the US and Canada.
Capitalizing on this shrinking opportunity will help drive ARPU and sales over the long term. What about Pinterest’s pricing problems? This situation is constantly changing and evolving, but my view is that once things stabilize, Pinterest’s ad business will rebound as retailers increase their marketing spend again. At the same time, the company is increasingly targeting small and medium-sized advertisers while implementing various artificial intelligence-based tools on its platform to improve engagement and improve the ad launch platform for businesses. So, Pinterest’s prospects remain bright, and the stock looks attractive after lagging the market significantly over the past year.
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Prosper Junior Bakiny has no position in any of the listed stocks. The Motley Fool has and recommends posts on Pinterest. Motley Fool has a disclosure policy.
3 Reasons to Buy Pinterest Stocks Like No Tomorrow was originally published by The Motley Fool
