Pinterest Rises 26.1% Year to Date: How Should You Play the Stock?

Pinterest, Inc. PINS shares have gained 26.1% year to date compared with the Internet - Software’s growth of 18.4%.The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this time frame.

Shares of PINS have outperformed peers like Snap Inc. SNAP but underperformed compared to Meta Platforms, Inc. META over this period. Snap shares have plunged 33.9%, while shares of META have risen 27.8% in the same time frame.

PINS Rides on User Growth, AI Focus

Pinterest is benefiting from solid user engagement across all regions. The company has taken several actions to boost personalization on the platform. The company recorded 578 million global monthly active users, with over 50% the MAUs being GenZ. This underscores the fact that Pinterest’s personalization initiative is paying off as it is able to attract one of the most vibrant and fast-growing user segments worldwide. 

The company recently reported that 100% of its users are logged in, and approximately 85% come to the mobile app directly. These factors show the sign of a growing loyal user base. Moreover, the Pinterest platform, which mostly has a female user base is able to gain ground in male demographics as well, with searches like rock climbing aesthetics rose 95% during the second quarter. Such user growth is supported by Pinterest’s leading-edge AI models, which significantly boosted the relevancy of content across the platform.

In the second quarter of 2025, the company generated $207.7 million of cash from operating activities compared with $106.4 million in the year-ago quarter. As of June 30, 2025, Pinterest had $1.21 billion in cash and cash equivalents and $137.4 million of operating lease liabilities. The company’s debt-to-capital ratio is pegged at 0.00%. In the second quarter, its current ratio is 8.76, well above the industry’s average of 1.95. A current ratio above 1 suggests that a company is well-positioned to meet its short-term obligations.

Major Challenges for PINS

Pinterest heavily relies on advertising as its one major source of revenue. Despite sustained growth in ad impressions, Pinterest witnessed a 25% year-over-year decline in ad pricing in the second quarter. As Pinterest moves into previously unmonetized international markets, it is experiencing a shift in the composition of ad impressions. In these regions, ad pricing is low compared to the mature markets of the United States and Europe. Strong volume growth in ad impressions is diluted by lower ad pricing, which reduces the average revenue per ad impression. This is expected to create margin pressure for the company. Growing geopolitical volatility and tariff-related uncertainties also remains a major concern.

Moreover, Pinterest is facing stiff competition from other major social media giants META, SNAP and Google’s YouTube as well. META is heavily investing in AI capabilities to drive user growth across its platform. Its Instagram platform has a strong e-commerce integration and has become one of the preferred choices among young audiences worldwide. SNAP continues to boast a strong presence among Gen Z users. Such factors will continue to impact PINS’ growth prospects in the near term.

Estimate Revision Trend of PINS

Pinterest is currently witnessing a downtrend in estimate revisions. Earnings estimates for PINS for 2025 have moved down 2.26% to $1.73 over the past 60 days, while the same for 2026 has decreased 1.86% to $2.11.

End Note

The integration of cutting-edge AI models and the introduction of advanced AI tools are driving user engagement across the platform. A strong balance sheet and significant cash flow allow the company to effectively invest in growth initiatives and make it resilient against macro headwinds to some extent.

However, tariff-related uncertainty can impact advertisers’ spending decisions. Reduction in ad spend can negatively impact Pinterest’s revenue growth. Stiff competition with other social media players will continue to strain the margin. The negative estimate revision portrays bearish sentiments about the stock’s growth potential. With a Zacks Rank #3 (Hold), PINS appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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