PINS Lost 12% In A Week. Do You Buy Or Wait?
Pinterest (PINS) stock is down 12.5% in 5 trading days. The stock looks attractive, but if you are going to buy it, you got to be in it for the long run. Do not expect quick bucks. Consider the following data:
- Size: A $23 Bil company with $3.9 Bil in revenue currently trading at $34.19.
- Fundamentals: Last 12 month revenue growth of 17.0% and operating margin of 5.5%.
- Liquidity: Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.5
- Valuation: Currently trading at P/E multiple of 12.0 and P/EBIT multiple of 107.2
- Has returned (median) 13.8% within a year following sharp dips since 2010. See PINS Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for PINS, see Buy or Sell PINS Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and PINS drops another 20-30% to $23.93 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Pinterest (PINS) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered. Before that, as a quick background: PINS visual discovery engine enabling users to find inspiration for recipes, style, home decor, DIY projects, and more, both in the U.S. and internationally.
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- PINS stock fell 80.7% from a high of $89.15 on 16 February 2021 to $17.19 on 14 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $44.98 on 25 June 2024 , and currently trades at $34.19
| PINS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -80.7% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- PINS stock fell 60.8% from a high of $89.15 on 16 February 2021 to $34.93 on 16 December 2021 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| PINS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -60.8% | -33.9% |
| Time to Full Recovery | Not Fully Recovered days | 148 days |
Worried that PINS could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.