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What Does Pinterest Have to Offer?

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Apr. 30 2019, Updated 11:08 a.m. ET

Women make up two-thirds of Pinterest’s user base

Pinterest (PINS) went public this month, debuting on the same day as video chat software provider Zoom (ZM). Both Pinterest and Zoom soared on their first trading day, bucking Lyft’s (LYFT) troubled debut.

Pinterest operates a digital pinboard. People use its platform to bookmark images they discover online to themed inspiration boards. Pinterest had 265 million monthly active users at the end of 2018, and two-thirds of them were women. Twitter (TWTR) and Facebook (FB) exited 2018 with 321 million and 2.3 billion monthly users, respectively.

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Ad-funded business

Pinterest monetizes its audience through advertising. A large number of Pinterest advertisers are CPG (consumer packaged goods) and retail brands. In its IPO filings with regulators, Pinterest portrayed a bright future for its advertising business, stating that CPG and retail brands had spent $64 billion on digital advertisements on its platform in 2018 and that the spending would increase as more brands shifted from traditional advertising channels such as TV commercials and newspapers to online marketing campaigns.

For investors, Pinterest offers another avenue into the booming digital advertising industry, which is currently dominated by Google (GOOGL) and Facebook. According to IDC estimates, the global digital advertising market is poised to grow to $423 billion by 2022 from $272 billion in 2018.

Pinterest’s revenue soared, and its loss narrowed

Pinterest generated revenue of $755.9 million in 2018, up from $472.9 million in 2017. The company saw revenue of -$63 million in 2018, but it narrowed sharply from -$130 million in 2017.

Pinterest went public on April 18, with its shares soaring 28% to $24.40 apiece on the first day. Its stock was priced at $19 for its IPO.

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