Investors in 2024 are obsessed with certain social-media companies. However, Pinterest (NYSE:PINS) isn’t one of those companies. That’s not a problem, though. If the market loses interest in Pinterest, hidden-gem seekers can seize the opportunity and load up on Pinterest stock.
The market might be ignoring Pinterest due to two recent high-profile social media stock debuts. Don’t get caught in the trap of new distractions. Stick to profitable businesses like Pinterest for long-term trading.
Pinterest’s Upside Potential
Headquartered in San Francisco, Pinterest operates an image-sharing platform. Notably, Pinterest has a partnership with Alphabet’s (NASDAQ:GOOG,NASDAQ:GOOGL) Google that will enable advertisements to be displayed on Pinterest via Google Ad Manager.
That’s huge news, but the market doesn’t seem to care. Pinterest stock has been mostly directionless in 2024 so far, and it’s still far below its 2021 peak of around $90.
This suggests a great setup as the Pinterest share price would double or more if it heads back toward $90.
I pounded the table for investors to look at Pinterest after the share price tumbled a couple of years ago. Now, it’s time to take action if you don’t want to miss out.
Remember, Pinterest has a good track record of quarterly EPS beats and has been consistently profitable.
This isn’t a fly-by-night operation, as Pinterest was incorporated 16 years ago and has a market capitalization in the tens of billions of dollars.
Pinterest Targets a Niche Market
As I hinted at earlier, the market has overlooked Pinterest this year because of a couple of headline-grabbing stock debuts.
During the past few months, investors started buying and selling Reddit (NYSE:RDDT) stock as well as Trump Media & Technology Group (NASDAQ:DJT) stock.
Whereas Pinterest has demonstrated consistent profitability, Reddit hasn’t delivered an annual profit since 2005, when the company first launched.
As for Trump Media, the company reportedly generated $3.4 million in revenue in the first nine months of 2023 but incurred an earnings loss of $49 million.
I’m not trying to convince you to avoid Reddit stock or Trump Media stock. Reddit and Trump Media distract the market, which is why short-term traders aren’t focused on Pinterest.
Besides, the audiences are quite different for these social-media companies. Pinterest has been quite successful in retaining a loyal user base of people who like to share and view pictures of crafts, collectibles, apparel and similar items.
In contrast, Reddit is much edgier and is focused on trending social-media news items.
Trump Media’s Truth Social platform is, as you might expect, conservative-leaning and emphasizes freedom of speech. Hence, Pinterest’s market share shouldn’t be threatened by these companies.
Pinterest Stock: Stick Around for the Up Cycle
In the world of investing, crowds tend to have short attention spans. They’ll obsess over new, shiny objects and then discard them after a while. Later on, after ignoring a solid business like Pinterest for a while, they’ll rediscover it.
The next thing you know, the stock’s down cycle is over and the up cycle begins. Any day now, the market could remember that Pinterest is an established, profitable business with loyal users.
Then, a buying spree could begin and suddenly, Pinterest becomes a darling of the market.
The idea is to buy Pinterest stock before it’s heavily favored by investors and the financial press, not afterwards. Don’t chase – instead, buy some Pinterest shares while people aren’t talking about the company.
Later, after the stock eventually doubles in value, you can decide whether to take profits or stay in the trade.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
