After a not-so-stellar second-quarter earnings report, Pinterest (PINS -1.97%) is now about 40% off its 52-week high. In this Fool Live video clip, recorded on Aug. 23, contributors Matt Frankel, CFP, and Jason Hall discuss why the beaten-down social media company could be a tremendous bargain for long-term investors. 

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Matt Frankel: A lot of people don't believe in Pinterest, Jason, I don't get it. I don't get the bear case for this one. One of the biggest things in my investment process, before I will put our money into a stock, after I've done all my research, stuff like that, crunched the numbers, is to try to talk myself out of it. You try to find the bear case, try to really look at the other side. Because if you don't understand the bear case, I'd say you haven't done enough research yet. The bear case for Pinterest is very weak, in my opinion. The big reason the stock has been beaten down, there are 454 million active users of Pinterest right now. In the U.S., which are their most monetized users by far, user base is declined by 5% year over year, the active users. Why is that? What were we all during a year ago? Probably exactly what Jason and I are doing right now, sitting in front of screens. We were all sitting at home looking at screens, nothing else to do but browse Pinterest, to browse whatever apps we want. Think of ideas for home remodeling projects, and think of ideas of good books to read. Everything Pinterest is great for, that's what we were doing last year. I'm not surprised with the user base drop. A lot of people are back outside, back going in places. I mentioned I went to a concert this weekend, that was time I didn't spend on the internet. It's not surprising to me. International users still grew 13% year over year, those are not very well monetized. The average Pinterest international user earn something like 5% of the revenue that the average U.S. user does, and it makes up 80%.

Jason Hall: If they can just get that at 50%. It's enormous growth in earnings.

Frankel: It's never going to fully match up, but there's definitely a lot of room to narrow the gap. That's 80% of the user base is international. They're making pretty much all of their money off 20% of their user base. That's what everyone's all up in arms about, that 20% went down by 5%. That's not the opportunity. The opportunity is to keep growing internationally, because 454 million, first of all, sounds like a lot. That's about one-sixth of Facebook's active users. There's a lot of room to grow that number still. There's a lot of room to monetize, especially in the international community. They really haven't done that to a large extent yet. They really haven't explored their e-commerce opportunity. People generally look at Facebook and stuff like that to have political fights. People look at Pinterest because they want to find things that they are eventually going to buy.

Hall: It's really hard to rage scroll on Pinterest.

Frankel: It's non-controversial, first of all, which is great for ad revenue. It's a natural platform that people find things they want to buy. Ads add to the experience in Pinterest, they don't take away from it. I get annoyed with Facebook ads and Twitter ads.

Hall: Oh, yeah. They add no value.

Frankel: Right. They're disguised to look like normal posts, so it's deceptive in a way. Pinterest ads add to the experience. They say, oh, you're looking for a great book to read? Check out this one that was just released. It doesn't take away from the experience as much as that on other social media platforms, and they are in the very early stages of integrating e-commerce into the platform, like actual ability to buy things. They partnered with Shopify to create product pins. That's just one potential use for this. There are a million different potential e-commerce uses alone for this. I think long run, their monetization could approach that of Facebook's.

Hall: For me, the single biggest reason I have no concern about that metric eroding a little bit, is those people didn't go to Facebook crafting or some other social platform. We didn't see Pinterest do this and then some other social network's platform do this as a result of taking those users away. That's the key. It's just people taking the phone out of their face, and turning it into a light, and holding it up at a concert. That's exact entirely the story. The bigger story is the long-term opportunity for growth and monetization, particularly of the international base, but not just it, I want to say that you talked a lot about that. But that's not the only opportunity. Because you think about adding the e-commerce tie-ins, there's still plenty of opportunity to increase its monetization of its U.S. user base, too. Because it's, I don't know, what? Thirty percent of Facebook, which is the gold standard, but there's still tremendous opportunity with its entire business to improve monetization.

Frankel: When you said Pinterest ads are less annoying. They're an easier to sell to the advertisers, in my opinion. If you keep building that user base and they're going to be an easier sell. That's Pinterest. That's the one that we're both most confident in putting new money in today. As soon as I'm allowed to, I can't because I just mentioned Pinterest. Every time I mention Pinterest, the clock starts over again. As soon as I'm allowed to, I'm probably going to add to my position. It's already my second- largest investment.