![]() ![]() Therefore, one can assume that, because Google had a good quarter in terms of ad sales, Pinterest will have similarly benefited. The company is heavily reliant on growth in ad sales to power its free cash flow. This has huge implications for Pinterest, since most of its revenue comes from ad sales as well. In addition, total sales were up about 41% overall. The company’s ad sales were up 43.2% to $53.13 billion, an increase from $37 billion a year ago. Typically, more than 81% of its revenue comes from advertising. Although analysts have lowered their 2022 revenue estimate slightly, there is another development with some of the company’s peers which allows for more confidence.įor example, Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) just reported very robust advertising revenue and earnings for Q3. However, since then, several things have happened. This then resulted in my price target of $81.15 per share. Next, I applied a 1.75% FCF yield metric to derive a potential market capitalization of $52.3 billion. This resulted in an estimate of $897 million in FCF for 2022. In fact, I applied it to analyst estimates for 2022 forecast revenue. I used that to estimate the average annual FCF for the year going forward. However, over the first six months, the average FCF margin was 36.1%. Last month, I wrote that Pinterest produced a lower FCF margin in Q2 (16.7%) than in Q1 (55.5%). That now represents potential upside of 78% from Oct. In my last article, I wrote that, based on its FCF production, PINS was likely worth $81.15 per share. Moving forward, I suspect the next earnings release to act as a catalyst for this stock. 15 as well as a more recent peak close of $62.68 on Oct. This is after it reached a peak close of $89.15 on Feb. ![]() 28 - is down over 30% year-to-date (YTD). In fact, the stock - at $45.61 as of the close of Oct.
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