Prediction: It's Not Too Late to Buy Pinterest Stock as Shares Soar

It's been a volatile year for Pinterest (NYSE: PINS) shares. The stock crashed in February after its Q4 earnings report, sending its shares down more than 40% at the start of the year. However, the stock has bounced back, helped by the backing of activist investor Elliott Investment Management, and more recently, a strong Q1 report.

Pinterest stock now finds itself down around 12% on the year, as of this writing. Let's dive into Pinterest's first-quarter results and prospects to see why I think it's not too late to buy the social media stock.

Revenue growth accelerates

Last quarter, Pinterest saw its stock get annihilated after it projected that its Q1 revenue would grow by between 11% and 14% to a range of $951 million and $971 million, which was a deceleration from the 14% growth it saw in Q4. That forecast proved to be ultra conservative, however, as its Q1 revenue accelerated to 18% growth to $1 billion. It was its fastest pace of growth since Q4 of 2024. The growth was led by a 24% increase in ad impressions, while ad prices fell by 5%.

However, geographical mix plays a big role in ad prices. Pinterest said that while it continued to see pressure with its largest retail advertisers, things improved compared to its expectations. It noted that artificial intelligence (AI) improvements, such as bidding optimization, started to help offset some of the headwinds with this group of advertisers late in the quarter. Meanwhile, it saw strength in other areas as it continued to work to broaden its advertiser base, including with mid-market, SMB (small and medium business), enterprise, and international advertisers.

Its strength was broad-based across regions. U.S. and Canadian revenue rose by 13% to $750 million, a notable acceleration from the 9% growth it recorded in Q4. European revenue jumped 27% to $186 million, and the "rest of world" segment revenue surged 59% to $72 million.

Pinterest's monthly active users (MAUs) grew by 11% to 631 million, once again led by an increase in "rest of world" users, which climbed 15% to 367 million. European users jumped 7% to 159 million. U.S. and Canadian MAUs, meanwhile, rose by 4% to 106 million.

Pinterest's global average revenue per user (ARPU) rose by 6% year over year to $1.68; however, this number is impacted by regional mix, and its individual regions were stronger. European ARPU jumped by 17% to $1.17, while "rest of world" ARPU climbed 38% to $0.20. U.S. and Canadian ARPU, meanwhile, rose by 9% to $7.12.

Turning to profitability, Pinterest saw its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climb by 20% year over year to $207 million. Adjusted earnings per share (EPS) jumped by 17% to $0.27, topping the $0.63 consensus.

Looking ahead, Pinterest projected its Q2 revenue to be between $1.133 billion and $1.153 billion, representing 14% to 16% growth year over year. Currency impacts will be a 1% tailwind, versus a 3% tailwind in Q1. It projected adjusted EBITDA of between $256 million and $276 million. The company expects EBITDA margin pressure to begin easing in the second half and to eventually be in the 30% to 34% range.

Image source: Getty Images.

Why it's not too late to buy the stock

Pinterest put up strong results despite the continued headwinds it is seeing from its large retail advertisers. The company has more exposure to large retailers and some sectors feeling pressure, such as home furnishings, than competitors like Meta Platforms. However, it has been leaning into AI and riding similar AI-fueled growth trends, while also doing a nice job of expanding its advertising customer base. As these headwinds eventually fade for its largest advertisers, its growth could accelerate even more.

Despite its recent gains, the stock is still cheap, trading at a forward price-to-earnings ratio (P/E) of just over 10.5 based on 2026 analyst estimates. Given its growth and valuation, the stock is still a no-brainer buy in my book.

Geoffrey Seiler has positions in Meta Platforms and Pinterest. The Motley Fool has positions in and recommends Meta Platforms and Pinterest. The Motley Fool has a disclosure policy.