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The Best Social Media Stock So Far This Year Is Pinterest

The Best Social Media Stock So Far This Year Is Pinterest
For investors interested in investing in social media companies, the focus is generally on companies like Facebook, Twitter and Snapchat.
But so far in 2020, Pinterest has sharply outperformed all of its tech peers at the stock market.
So far this year, there has been a 125 per cent growth in the stocks of Pinterest while the stocks of Facebook has grown in price by 25 per cent while Twitter and Snap have seen their stocks rise by 40 per cent and 60 per cent respectively.
Thanks to Apple's new look, the image-sharing site has even more upside, believes several analysts.
A new folder-heavy update that makes it easier to customize iPhone home screens was introduced in Apple's recent iOS 14 release. As a consequence in recent weeks, there have been reports of record downloads of Pinterest on the App Store. There were also reports of people tweeting screengrabs of their new home screens and giving Pinterest posts the credit for the inspiration to do so.
"More users are coming on board following iOS 14," said DJ Kang, CEO of ValueChampion, an investing research website. "That's attractive to advertisers."
While noting that since the iOS 14 by Apple, there has been an increase in Pinterest downloads, Kang said that the company’s monetization rates internationally could be boosted if there is a sustained interest in the social media firm. At present, the average revenue that Pinterest generates per user in the United States is more than three times of the revenue that it generates from its international users.
Kang believes that company can possibly attract more users because of its new Story Pins feature that allows a user to create and post a combination of photos, video, audio and text. This, according to Kang, can be very appealing for the Gen Z consumers who have been attracted away from Pinterest and towards the likes of Snapchat, Facebook-owned Instagram and even the embattled video app TikTok.
Despite the positives, Pinterest still needs to show long term viability and profitability for investors at Wall Street. After etching out a profit in the fourth quarter of 2019, the company has reported loss in the its past two quarters.
There is however hope that this social media company could be finally turning the corner.
According to the latest estimates of analysts, they expect Pinterest to turn out a small profit for the current year of 2020 while predicting an increase in its earnings in 2021.
And their price targets on the stock have been raised by 20 of the 28 analysts who follow Pinterest after the company reported second quarter results in late July.
Another reason that is in favour of Pinterest is that it is still relatively small compared to some of the other social media companies like Facebook and other tech companies like the YouTube owner Google.

Christopher J. Mitchell

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