Pinterest vs. The Trade Desk: Which Media Stock Is a Better Buy for 2027?

Can a visual discovery engine outperform a backend advertising powerhouse in your portfolio? Deciding between Pinterest (NYSE:PINS) and The Trade Desk (NASDAQ:TTD) requires looking at how digital marketing is evolving for 2027.

Pinterest operates as an ad-supported digital platform where users find inspiration, while The Trade Desk provides a self-service software solution for advertisers to buy space across the open internet. Investors compare them because both represent high-growth avenues within the digital advertising market. Understanding their financial health and competitive risks is essential for anyone choosing between these two growth stocks today.

The case for Pinterest

For those considering investing in social media stocks, Pinterest offers a unique visual search and shopping destination. In its latest annual report, the company notes it sells advertising space to brands wanting to reach over 600 million monthly active users during the discovery phase. This platform focuses on advertisers in retail and consumer goods, helping them move users from inspiration to an actual purchase.

In its 2025 fiscal year (FY), revenue reached $4.2 billion, representing a growth rate of 15.8% over the previous year. The company reported net income of $416.9 million for the period. This resulted in a 9.9% net margin, which measures the percentage of revenue kept as profit after all expenses.

As of its December 2025 balance sheet, the company had a debt-to-equity ratio of 0.1x and a current ratio of 7.6x, which tracks its ability to pay short-term bills. Free cash flow, which is cash from operations minus capital expenditures, reached $1.3 billion for the year. Note that stock-based compensation (SBC) represented roughly 68.6% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

The case for The Trade Desk

The Trade Desk operates a cloud-based platform that helps advertisers buy digital ad space across mobile, video, and connected television. In its latest annual report, the company disclosed that two holding company clients accounted for more than 10% of gross billings in 2025. This customer concentration adds a layer of risk, even as it maintains an ecosystem of hundreds of integrated ad exchanges and data vendors.

In FY 2025, the company generated revenue of $2.9 billion, a growth of 18.5% year over year. Net income for the fiscal year was $443.3 million, a steady increase from previous periods. This performance led to a net margin of 15.3%, showing how much profit the company retains from every dollar of sales.

As of its December 2025 balance sheet, the debt-to-equity ratio was 0.2x and the current ratio was 1.6x. Free cash flow, or cash from operations minus capital expenditures, was $795.7 million for the fiscal year. Note that stock-based compensation represented 49.4% of operating cash flow, which inflates reported cash generation.

Risk profile comparison

Pinterest faces heavy reliance on advertising revenue and the effectiveness of third-party measurement tools while competing with the likes of Amazon and Meta Platforms for advertiser spending. The company must also navigate evolving data privacy laws like the EU AI Act and ongoing securities litigation. Risks also stem from content moderation challenges and the rapid adoption of new artificial intelligence technologies.

The Trade Desk relies heavily on the growth of the programmatic advertising market and faces intense competition from established giants like Alphabet, whose Google advertising platform dominates digital advertiser demand. Changes in browser privacy settings could limit access to vital data identifiers, impacting how the company targets ads. Additionally, privacy-related lawsuits remain a persistent legal exposure.

Valuation comparison

Pinterest provides a significantly lower entry point based on future earnings estimates, while The Trade Desk appears cheaper relative to its trailing twelve-month sales volume.

The Forward P/E ratio, which compares the current stock price to future earnings estimates, highlights the difference in how the market prices these two firms. Additionally, the P/S ratio measures a company's market value against its sales over the past twelve months.

Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy for 2027?

Both Pinterest and The Trade Desk depend on advertising to generate income, but of the two, I would prioritize investing in Pinterest stock.

The social media platform has done an excellent job of growing its user base. In the third quarter of 2026, Pinterest reported record high global monthly active users (MAUs) of 661 million, which is a strong 10% year-over-year increase. Gen Z represents the fastest-growing and most engaged demographic on the platform, and is 57% of total users.

Pinterest faces some short-term headwinds because Europe removed tax exemptions on low-cost cross-border imports, causing a pullback in spending among advertisers selling these products. However, given the strong MAUs it's enjoying, Pinterest's revenue is poised to rebound over the long term.

The Trade Desk's business appears headed in the opposite direction from Pinterest, as it forecasted its Q3 sales will decline year over year. Its revenue growth has steadily fallen in recent quarters. Part of the problem is its customer concentration. The Trade Desk had a high-profile public dispute with the French advertising and PR holding company Publicis Groupe, which cut spending, causing The Trade Desk's revenue to plunge.

Robert Izquierdo has positions in Alphabet, Amazon, Meta Platforms, Pinterest, and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Pinterest, and The Trade Desk. The Motley Fool has a disclosure policy.