- Pinterest stock collapsed as the market was disappointed in the growth outlook, but long-term investors are unfazed.
- The company continues to post strong top and bottom-line growth as it rolls out its advertising partnerships.
- The market may be missing the big picture here – this is a high quality stock trading at low valuations.
- I am upgrading the stock to a strong buy.
- I am Julian Lin, a financial analyst with a focus on companies with secular growth that improve over time. I lead the investing group Best Of Breed Growth Stocks where I target the best growth companies in each sector.
Pinterest, Inc. (NYSE:PINS) was one of the many tech stocks to experience the market’s wrath for disappointing against high expectations. The stock had previously been a big winner, seemingly earning Wall Street’s love as its third-party advertising partnerships yielded substantial momentum to both top and bottom-line growth. The company continues to be a cash-generating growth machine backed by a net cash balance sheet, but the market appears to be more focused on the disappointing growth guidance. Long-term investors, however, should not quibble about 100 bps of lower than expected growth, but may find the stock looking quite attractive after the selloff. I am now upgrading the stock to “strong buy” on account of the improved valuation.
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