Stocks With Potential: Pinterest

In two weeks, it will be the first anniversary of the 2019 COVID-19 chaos officially taking over Wall Street. We saw that between February 19 and March 23 of the previous year, the S&P 500 had lost more than a third of its reference value. This situation that occurred during an unprecedented epidemic was an astonishing change. But out of this chaos, we also watched growth stocks emerge as real winners. Historically low lending rates and Washington's ongoing financial incentives are encouraging fast-growing companies to keep their feet on the gas pedal.

Coming into February, the following three growth stocks stand out with the chance to make investors richer now and for years to come.

Pinterest

In the short term, social media giant Pinterest (NYSE: PINS) is the kind of growth you would want to have. Like most tech stocks, Pinterest has benefited from the COVID-19 outbreak in several ways. People who couldn't leave their homes spent more time surfing the internet. This helped Pinterest's user growth accelerate beyond the 30 percent annual growth recorded between 2017 and 2019.   For example, monthly active user (MAU) growth was 37 percent in the quarter at the end of September. What's more, Pinterest won advertisers back from Facebook (NASDAQ: FB) over the summer. While you may not understand this from Facebook's excellent business results, the company has faced backlash for not taking action to limit hate speech. For this reason, some companies shot or reduced their ads for a short time with Facebook. While no other platform comes close to Facebook's 2.8 billion monthly active users, Pinterest has seen a healthy increase in ad revenue due to Facebook's inaccuracies. Looking ahead, two key factors have the potential to drive Pinterest's value much higher. The first are non-US users of the company. About 90 percent of the new monthly active users (MAUs) are from non-US countries. While average revenue per user (ARPU) tends to be much lower in international markets, it is much easier to double the international ARPU than to increase the ARPU in the US. Pinterest managed to double the international ARPU in 2019 and will likely be able to double that several times over the next decade. Another exciting factor is that Pinterest has the potential to be a leading e-commerce platform. Pinterest should arguably be the most targeted social media platform for advertisers and small businesses, as users willingly share whatever interests them.

Stocks With Potential: Pinterest

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