Time To Buy Pinterest Stock?

August 11th, 2025 by Trefis Team

PINS

Pinterest (NYSE:PINS) recently dropped 10% after its quarterly earnings missed expectations. However, despite this decline, we believe the stock is an attractive buy at its current price of around $35. The stock’s valuation appears moderate, and our analysis shows there is minimal cause for concern.

We reached this conclusion by evaluating Pinterest’s current valuation against its recent operating performance and its current and historical financial health. Our analysis, which covers key parameters such as Growth, Profitability, Financial Stability, and Downturn Resilience, indicates that the company has a strong operating performance and financial condition.

However, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio, which has comfortably outperformed its benchmark — a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 91% since its inception. Separately, see – The Trade Desk: Buy TTD Stock Now At $55?

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Image by Souvik Banerjee from Pixabay

How Does Pinterest’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, PINS stock looks moderate compared to the broader market.

Pinterest has a price-to-sales (P/S) ratio of 6.8 vs. a figure of 3.0 for the S&P 500
Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 24 compared to 20.6 for S&P 500
And, it has a price-to-earnings (P/E) ratio of 13 vs. the benchmark’s 22.6

How Have Pinterest’s Revenues Grown Over Recent Years?

Pinterest’s Revenues have seen notable growth over recent years.

Pinterest has seen its top line grow at an average rate of 12% over the last 3 years (vs. increase of 5.2% for S&P 500)
Also, its quarterly revenues grew 17% to $998 Mil in the most recent quarter from $854 Mil a year ago (vs. 4.3% improvement for S&P 500)

How Profitable Is Pinterest?

Pinterest’s profit margins are higher than most companies in the Trefis coverage universe.

Pinterest’s Operating Income over the last four quarters was $216 Mil, which represents a poor Operating Margin of 5.5% (vs. 18.4% for S&P 500)
Pinterest’s Operating Cash Flow (OCF) over this period was $1.1 Bil, pointing to a high OCF Margin of 27.5% (vs. 19.8% for S&P 500)
For the last four-quarter period, Pinterest’s Net Income was $1.9 Bil — indicating a considerably high Net Income Margin of 49.3% (vs. 12.3% for S&P 500)

Does Pinterest Look Financially Stable?

Pinterest’s balance sheet looks very strong.

Pinterest’s Debt figure was $137 Mil at the end of the most recent quarter, while its market capitalization is $24 Bil (as of 8/10/2025). This implies a very strong Debt-to-Equity Ratio of 0.6% (vs. 24.1% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
Cash (including cash equivalents) makes up $2.7 Bil of the $5.4 Bil in Total Assets for Pinterest. This yields a very strong Cash-to-Assets Ratio of 49.2% (vs. 6.7% for S&P 500)

How Resilient Is PINS Stock During A Downturn?

PINS stock has fared much worse than the benchmark S&P 500 index during the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

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 around $35
See – Buy or Sell PINS Stock – for more details.

Putting All The Pieces Together: What It Means For PINS Stock

In summary, Pinterest’s performance across the parameters detailed above are as follows:

• Growth: Strong
• Profitability: Strong
• Financial Stability: Very Strong
• Downturn Resilience: Very Weak
• Overall: Strong

The Verdict

Overall, Pinterest has demonstrated strong performance across key metrics. The company’s current valuation, at 6.8 times trailing revenues, is in line with its four-year average price-to-sales ratio of 7.3. However, with solid cash flow margins and accelerating revenue growth, the stock has potential for further appreciation.

Pinterest is experiencing strong momentum, with its global monthly active users growing 11% year-over-year to a record 578 million. This growth is driven by AI-powered personalization and strategic partnerships. As this trend continues, it could justify a higher valuation multiple for the stock.

Now, we could be wrong in our assessment, and potential investors should be aware of several risks. Factors such as tariff-related advertising concerns, a slowdown in global ad spending, or a shift in advertiser preferences could negatively impact Pinterest’s growth. The company also faces increasing competition, and its stock can be particularly volatile during economic downturns. Investors should carefully consider these risks and be prepared for the possibility of a significant decline in the stock’s value.

That said, for patient investors with a 3-5 year time horizon, Pinterest could be a compelling investment, particularly with the rise of augmented reality shopping experiences. While PINS stock looks promising, investing in a single stock can be risky. On the other hand, 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.

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