With quite a few excellent companies trading on the public markets, it definitely isn't easy to choose just one. But if I had to pick only one stock right now, it would be Pinterest (NYSE:PINS). The social media company has a product that people love, has plenty of room to grow, and is priced relatively fairly. 

It also checks a couple of boxes for my investing preference: It has a sustainable business model, and it's in an industry that's growing. Furthermore, since I only invest money that I won't need for at least five years, stock price volatility does not concern me as much. 

A man in a red sweater and blue jeans with is fingers crossed and his face not shown.

Image source: Getty Images.

The price is right 

Pinterest is trading at a forward price-to-sales ratio of 14, in the middle of the pack of its competitors in the social media space (see chart). The price-to-sales ratio can be one of the most informative ratios to consider when comparing companies that may not be profitable. The stock is down by over 30% in the last 30 days. The sell-off was in response to management guiding flat user growth in the U.S. next quarter.

Investors are concerned that social media usage will falter as more people get vaccinated, meaning COVID-19 infection rates will keep trending down resulting in easing business restrictions. In other words, as people return to pre-pandemic habits, Pinterest may not be able to command a growing user base as it did during the lockdown. 

Indeed management acknowledged this headwind and is expecting engagement on its site to moderate as folks are less restricted in their outdoor activities. Still, this is more of a short-term issue, as those following the stock didn't expect elevated levels of engagement to last when people had more options with their time. 

A chart comparing Pinterest, Twitter, Snapchat, and Facebook using the price to sales ratio.

Data source: YCharts. PS = Price-to-sales ratio. 

The future is bright 

Over the long run, Pinterest could add tens of millions or even hundreds of millions of new users to its platform. Pinterest said it had 478 million monthly active users in its most recent quarterly report, up by 30% from last year. Still, there is room to grow -- Facebook (NASDAQ:FB) has a total of 2.85 billion monthly active users. People like social media apps. They are free to download and sign up and come with cool features. Pinterest allows users to browse through inspiring images and pin them to personal boards for viewing later. 

The driving force, however, is existing users encouraging new users in a virtuous cycle. On Pinterest, users can share pins with others. For instance, my wife often shares an image of a meal she is considering making for dinner and asks me what I think about it. Imagine having access to a continuously updated cookbook at your fingertips, one that's totally free. And that's just one use case. It's no wonder why Pinterest is gaining users by the millions.

Moreover, Pinterest is not as far along in monetizing its user base like Facebook. In its Q1 statement, Pinterest generated an average revenue per user (ARPU) of $1.04 while Facebook's ARPU was $9.27. Pinterest only recently began monetizing users in its first Latin American country (Brazil) and began monetizing Mexico's user activities in May. As it builds out its products for marketers in more regions with more capabilities, its ARPU can get closer to Facebook's.

Already, Pinterest is closing the gap. For example, while Facebook grew revenue by 48% in the most recent quarter, Pinterest increased it by 78%. Similarly, while Facebook expects to grow revenue near 50% in the second quarter, Pinterest expects over 100%.

Facebook is an excellent company that has made shareholders wealthier. In Pinterest, I see a younger Facebook, built on a better foundation (positive content), that has the potential to increase my wealth over the long run. For those reasons, if I had to pick only one stock to buy, it would be Pinterest. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.