Bearish Thesis: You can’t monetize an app that has little engagement and cannot track customer buying behavior.
The 2020 Q4 letter to shareholders gives us an update.
....
/4
$PINS
New Information: “Shopping ad revenue once again grew faster than our overall business and we saw a 6x increase in the number of businesses that used the shopping ads format in Q4.”
....
/5
$PINS
....
Between January and August 2020, there was a 300% increase in add-to-cart and checkout attributed conversions.
/6
$PINS
Prior Bearish Thesis: Pinterest has no videos and video is the future of all things content.
New Information: People watch close to one billion videos a day on Pinterest. In fact the company’s exact words are:
....
/7
$PINS
...
“One thing you may not realize: Pinterest is already a video platform. Video is absolutely exploding on Pinterest.”
/8
$PINS
Prior Bearish Thesis: Pinterest is only for women.
From another Pinterest Business post we get:
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/9
$PINS
...
New Information: At 60% women, the gender divide on Pinterest may be narrowing. The company’s global Head of Business Marketing identifies men as one of the platform’s fastest-growing demographics.
/10
$PINS
Prior Bearish Thesis: There is no room for Pinterest. Facebook, Instagram, and Google control the ad world.
New Information: 92% of Pinterest advertisers rank the platform first for reputation via @pinterestbiz
/11
$PINS
And finally, since we're taking about stock...
Last quarter:
Pinterest delivered 76% revenue growth with adjusted EBITDA of 42%.
That is, 76 + 42 = 118.
(The rule of 40 is a high water mark for software. This is the rule of 100.)
.../12
$PINS
Q4 Revenue: $706 million versus analyst expectations of $642.95 million.
Q4 Adjusted EPS: $0.43 versus analyst expectations of $0.32.
But, it's the future that matters, not the past, so...
/13
$PINS
On 2-4-2021 the company also reported guidance for the same quarter.
Revenue Guidance: The company guided to low 70 per cent growth, which would mean at least $460 million versus analyst expectations of $430.75 million.
....
/14
$PINS
So, eh, channel checks 🤷♂️
I see the fastest growing company with over $1.5B in sales w EBITDA margin >40%, and guidance to 70%.
Maybe the company falls flat for Q1.
I'm in it for the money, and the money isn't in shorting this name for the long term.
/15 fin
$PINS Oh yeah. This was from CML Pro which you can learn about here:
CML members, we are soon to get community out to everyone, for now I'll share my thoughts from there, here.
Two narratives exist:
1. Getting over COVID, job growth, consumer spending, GDP growth will cause permanent inflation due to the collision with accomodative fiscal and monetary policy.
Higher inflation means higher rates which impact long term valuations due to discount rates.
2. Resulting inflation is temporary, just as COVID's recession was temporary; getting out is the start to another economic boom and a bull market.
$LFMD LifeMD Q1 2021 Revenues on Track to Exceed $17 Million, up 295%, with Subscriptions Representing More than 80% of Total Revenue cmlviz.com/article.php?ar…
2/n
$LFMD
Subscriptions are expected to generate more than 80% of revenue in the quarter, compared to about 63% in the same year-ago period.
3/n
$LFMD
Given that 80% of revenue is recurring/subscription, this feels more like a technology company than anything else.
295% growth now on a $68M run rate, this company should do $100M in revenue in 2021.