Pinterest needs a growth catalyst

Article Excerpt

PINTEREST INC. $22 is a hold. The company (New York symbol PINS; Consumer sector; Shares outstanding: 673.5 million; Market cap: $14.8 billion; No dividend paid; Takeover Target Rating: Medium; www.pinterest.com) operates a social media platform that relies on images to create user interest. The users of the company’s site “pin” items they like to their personal pages so that their friends and followers can view their curated lists on subjects such as recipes, clothing, household goods and places to travel. The site now has more than 433 million monthly active users (MAUs). Elliott Management recently announced it now owns more 9% of Pinterest. It will likely push management to better monetize its user base. Pinterest could also be a target of Microsoft Corp. (Nasdaq symbol MSFT) or PayPal. The two tech giants were interested in the company when it was worth $50 billion, significantly higher than today’s $14.8 billion valuation. Pinterest also holds cash of $2.7 billion and has no debt. Pinterest is a hold. hold…

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