Is Pinterest Set for a Rebound After TikTok’s Surprise $14B Valuation News?

If you are holding Pinterest stock right now or eyeing it for your watchlist, you are not alone in feeling some whiplash. After a rocky few weeks that saw shares tumble by 16.2% over the past month and basically flatline at -0.2% for the last week, it is understandable to wonder what comes next. On a longer timeline, things look even more complex, with a modest 4.0% gain year-to-date, a dip of 6.1% over the past year, and a wild ride over five years showing a decrease of 27.7%. Still, a 37.8% gain over three years hints that Pinterest is no stranger to rapid shifts in sentiment.

What is driving these moves? A lot of eyes are on TikTok's ongoing drama, as regulatory shakeups and buyout talk swirl. TikTok's potential U.S. split-up, possibly at a valuation that is mere crumbs compared to its parent, has put attention on what other digital platforms such as Pinterest might achieve if competitors hit disruption. Investors are recalibrating risk and growth assumptions for the entire social media space as new deals get floated in Washington.

But here is what really stands out: No matter the daily stock squiggles, Pinterest earns a clear 6 out of 6 on our valuation scorecard. That means it is undervalued across every major metric we analyze, which does not happen often. Over the next sections, I will break down what goes into this score, and why the market might be overlooking Pinterest's potential. I will also share an even more effective framework for judging value beyond the usual numbers at the end.

Why Pinterest is lagging behind its peers

Approach 1: Pinterest Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model seeks to estimate a company's intrinsic value by projecting its future cash flows and discounting them back to their value today. In Pinterest's case, current Free Cash Flow stands at $1.05 Billion. Analysts anticipate these cash flows will grow steadily over the coming decade, reaching approximately $3.28 Billion by 2035, with reliable estimates from multiple sources up to 2029 and further projections extrapolated thereafter.

The model calculates Pinterest's intrinsic value at $72.97 per share. When compared to its current share price, this value implies the stock is trading at a 56.4% discount. In other words, Pinterest is considered 56.4% undervalued using this rigorous cash flow analysis. This suggests the market may be pricing in excessive pessimism about Pinterest's future revenue or growth potential, especially given the steadily rising Free Cash Flow outlook over the next 10 years.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Pinterest.

Our Discounted Cash Flow (DCF) analysis suggests Pinterest is undervalued by 56.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Pinterest Price vs Earnings (P/E Ratio)

The Price-to-Earnings (P/E) ratio is a straightforward and widely used way to value profitable companies like Pinterest. It compares what investors are paying for a share relative to each dollar of company profit, making it particularly useful for businesses with consistent earnings such as Pinterest.

What is considered a "normal" or "fair" P/E ratio largely depends on expectations for a company’s earnings growth, the level of risk investors see in the business, and the overall health of its sector. Higher growth prospects or greater earnings stability can justify a higher P/E, while risk or weak growth typically calls for a lower one.

Pinterest’s current P/E ratio stands at just 11.2x. This is a significant gap compared to both its industry average of 16.6x and the average among its peers at 59.9x. Instead of relying solely on these benchmarks, Simply Wall St's proprietary "Fair Ratio" digs deeper. It estimates a fair P/E of 16.9x for Pinterest, factoring in not just industry norms but also the company’s profit margins, earnings growth outlook, market cap, and unique risk profile. This tailored metric offers a more accurate reflection of what the stock should be valued at, considering its strengths and industry position.

Comparing Pinterest’s actual P/E of 11.2x to the Fair Ratio of 16.9x shows the shares trade substantially below what would be justified by the company’s fundamentals and prospects. This suggests it is undervalued on this measure.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Pinterest Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, powerful tool that goes beyond the numbers by letting you apply your own story and assumptions to a company. It links what you believe about its future revenue, earnings, and margins to a personal fair value estimate. Narratives bridge the gap between financial forecasts and real-world events, connecting your thesis about Pinterest to the numbers and a fair value per share.

Available to everyone in the Simply Wall St Community, Narratives are easy to use and update dynamically as new information or earnings are released. They let you track in real time how shifts in news or strategy impact your outlook, and compare your Fair Value to the live price, supporting more confident buy or sell decisions.

For Pinterest, Narratives help visualize just how differently investors see the stock: some estimate fair value as high as $109, expecting rapid revenue growth and margin expansion, while others set much lower targets around $26, reflecting more cautious assumptions about competition and monetization challenges. In this way, Narratives empower you to make smarter, more contextualized investment calls in a fast-changing market.

Do you think there's more to the story for Pinterest? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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