According to him, “We believe the company’s unique and broadly appealing proposition, offering consumers the ability to view and collate visual recommendations will enable ongoing robust user growth… We expect significant monetization upside given the higher purchasing intent of the user base, yet lower current [average revenue per user] than other ad-supported platforms.”
Cordwell estimated that Pinterest’s sales will increase from $765 million in 2018 to $1.1 billion this year. He also expected the social media company to post profits on an adjusted, non-GAAP basis this year and on generally accepted accounting principles by 2021.
Pinterest’s engagement is weaker than other social networks
Although Cordwell is very optimistic about the future of Pinterest, he is concerned about its weaker engagement than its peers such as Facebook (NASDAQ: FB) and Twitter (NYSE: TWTR).
He noted, “While Pinterest has a compelling use case, its lack of a material social element means engagement is less strong than at peers … We believe its engagement metrics are materially below those of the social networks (Facebook, Twitter, Snap) due to it not having the same ‘call to action’ that comes from updates by friends, family and other accounts.”
