Pinterest: More Downside For PINS Stock?

The Pinterest logo displays on a mobile phone with the Pinterest icon in the background in this photo illustration in Brussels, Belgium, on August 9, 2025. (Photo by Jonathan Raa/NurPhoto via Getty Images)

NurPhoto via Getty Images

Pinterest (NYSE:PINS) has recently experienced a 10% decline after its quarterly earnings fell short of expectations. Nevertheless, despite this downturn, we consider the stock to be a worthwhile investment at its current price of approximately $35. The valuation of the stock seems reasonable, and our analysis suggests that there is little cause for worry.

We arrived at this conclusion by assessing Pinterest’s present valuation in relation to its recent operational performance as well as its current and historical financial health. Our analysis, which addresses critical parameters including Growth, Profitability, Financial Stability, and Downturn Resilience, shows that the company maintains a strong operational performance and financial condition.

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How Does Pinterest’s Valuation Compare To The S&P 500?

According to what you pay per dollar of sales or profit, PINS stock appears moderate when set against the broader market.

• Pinterest has a price-to-sales (P/S) ratio of 6.8 compared to a value of 3.0 for the S&P 500
• Moreover, the company’s price-to-free cash flow (P/FCF) ratio stands at 24, while for the S&P 500, it is 20.6
• Additionally, it possesses a price-to-earnings (P/E) ratio of 13 against the benchmark’s 22.6

How Have Pinterest’s Revenues Grown In Recent Years?

Pinterest’s Revenues have exhibited significant growth in the last few years.

• Pinterest has achieved an average growth rate of 12% in its top line over the past 3 years (in comparison to an increase of 5.2% for the S&P 500)
• Its quarterly revenues have increased by 17% to $998 million in the latest quarter from $854 million a year prior (against a 4.3% rise for the S&P 500)

How Profitable Is Pinterest?

Pinterest’s profit margins exceed those of most companies covered in the Trefis universe.

• Pinterest’s Operating Income over the past four quarters was $216 million, reflecting a modest Operating Margin of 5.5% (in comparison to 18.4% for the S&P 500)
• Pinterest’s Operating Cash Flow (OCF) during this timeframe was $1.1 billion, indicating a high OCF Margin of 27.5% (versus 19.8% for S&P 500)
• Over the last four-quarter period, Pinterest’s Net Income was $1.9 billion—demonstrating a notably high Net Income Margin of 49.3% (compared to 12.3% for S&P 500)

Is Pinterest Financially Stable?

Pinterest’s balance sheet appears to be very robust.

• Pinterest’s Debt amount was $137 million at the conclusion of the most recent quarter, while its market capitalization stands at $24 billion (as of 8/10/2025). This represents a very strong Debt-to-Equity Ratio of 0.6% (in comparison to 24.1% for S&P 500). [Note: A low Debt-to-Equity Ratio is favorable]
• Cash (including cash equivalents) constitutes $2.7 billion out of the $5.4 billion in Total Assets for Pinterest. This results in a very strong Cash-to-Assets Ratio of 49.2% (compared to 6.7% for S&P 500)

How Resilient Is PINS Stock In A Downturn?

PINS stock has performed far worse than the benchmark S&P 500 index during recent downturns. As investors hope for a soft landing in the U.S. economy, what could the implications be if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash showcases how key stocks performed during and after the last six market crashes.

Inflation Shock (2022)

• PINS stock dropped 80.7% from a peak of $89.15 on 16 February 2021 to $17.19 on 14 June 2022, contrasted with a peak-to-trough decline of 25.4% for the S&P 500
• The stock has not yet returned to its pre-Crisis high
• Since then, the highest the stock has achieved is 44.98 on 25 June 2024 and currently trades at about $35
• Refer to – Buy or Sell PINS Stock – for additional details.

Putting Everything Together: Implications For PINS Stock

In summary, Pinterest’s performance across the discussed parameters is as follows:

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

The Verdict

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

Pinterest is experiencing robust momentum, with its global monthly active users increasing 11% year-over-year to an all-time high of 578 million. This surge is fueled by AI-driven personalization and strategic partnerships. As this trend progresses, it could warrant a higher valuation multiple for the stock.

That said, our assessment may be incorrect, and potential investors should remain cognizant of several risks. Aspects such as tariff-related advertising issues, a slowdown in global ad spending, or a shift in advertiser preferences could adversely affect Pinterest’s growth. Furthermore, the company faces escalating competition, and its stock may exhibit considerable volatility during economic downturns. Investors ought to weigh these risks carefully and be ready for the possibility of a significant drop in the stock’s value.

That said, for patient investors looking at a 3-5 year horizon, Pinterest could represent an appealing investment, particularly with the growth of augmented reality shopping experiences. While PINS stock appears promising, investing in a single stock carries inherent risks. Conversely, the Trefis High Quality (HQ) Portfolio, which holds a selection of 30 stocks, has a history of consistently outperforming its benchmark, which includes all three—the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; a smoother ride, as demonstrated in HQ Portfolio performance metrics.