that PinterestStocks (NASDAQ:TSP) and E-Commerce: We Fools have seen potential synergies for a while. However, this possible investment thesis is now becoming mainstream. Probably also because, among other things, with Bill Ready, a civil servant has joined as managing director who has the necessary know-how in the field.
However, e-commerce is not exactly new. Nevertheless, it still offers great potential. Analysts are now jumping on this bandwagon. Should foolish investors do the same? Let’s find out!
Pinterest Stock: The e-commerce!
In fact, for several quarters there have been increasing signs that e-commerce is the future of Pinterest stock. Or: A logical connection with a view to the current ecosystem and the previous operational orientation.
The management, still around the old CEO, for example, has bought and developed applications that make lists possible. Intended as shopping or wish lists that can enable online shopping integration. Or smart technology that recognizes certain products and shows the respective purchase option. These were the first latent signs for foolish investors that e-commerce was becoming more important.
It has been clear for several months: With CEO Ready, e-commerce should be a transformative element. It is noteworthy that the first analysts now also emphasize this. Goldman Sachs recently raised its price target and issued a Buy rating, citing that Pinterest stock could see greater e-commerce integration. If it increases the average turnover per user, it should provide growth, more profitability and more. But it’s actually no longer a secret.
Whether e-commerce is known about Pinterest shares or whether it still has subliminal importance is actually more of a secondary question for me. What is crucial is that these growth opportunities have not yet been priced in.
Pinterest currently has a market cap of $17.4 billion. The price-to-sales ratio is 6.7, and even the 2021 price-to-earnings ratio of 52.7 is not favorable at first glance. However, e-commerce can open up a completely new, gigantic sales potential. At least it is not sufficiently appreciated for me at the moment, on the possibility side. But at the moment the market is also more focused on risks.
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Vincent owns shares in Pinterest. The Motley Fool owns stock in and recommends Pinterest.