The Russian invasion of Ukraine has roiled fuel markets, and as a result, consumers have seen gas prices rise above $6 per gallon in some areas of the U.S. Now, some politicians are working on plans to send constituents gas rebates. In California, for instance, the governor aims to send people in the state $400 per registered vehicle, available for two cars per household. The Sunshine State is not the only one considering some form of stimulus to help folks cope with higher gas prices.
If you are expecting a stimulus check due to rising gas prices, and you will not need it for necessities for several years, then investing in the stock market could be an excellent option. More specifically, Pinterest (PINS -0.64%) is a stock down 71% that you can buy right now.
Image source: Getty Images.
Pinterest's revenue keeps rising
Pinterest is an image-based social media app. Like many of its peers, it thrived at the pandemic's onset as billions of people spent more time at home. The company surged to reach 478 million monthly active users. Signing up and using the service is free to consumers; Pinterest only makes money by showing advertisements as users browse.
In that regard, it had been doing well even before the pandemic. From 2017 to 2019, Pinterest grew revenue from $476 million to $1.1 billion. The pandemic kept the momentum going, and the company expanded from $1.1 billion to $2.6 billion in revenue from 2019 to 2021.
Still, Pinterest only boasts a tiny fraction of the $763 billion that advertisers spent in 2021. The massive market size means Pinterest has a long runway if it can keep executing its strategy of growing monthly active users and getting them to spend more time with each visit. Pinterest may be free to use, but so are YouTube, Instagram, and TikTok. Management must keep innovating the service to sustain the attention of existing users and attract new ones.
Keeping people's attention has been a difficult task for Pinterest of late. The company has lost 55 million monthly active users and is on a streak of three consecutive quarters of user losses. It attributes the decline to the economic reopening. People are spending less time at home and are looking to Pinterest less often for inspiration on activities like cooking, decorating, and organizing.
Pinterest isn't resting on its laurels. Earlier this month, management announced a number of new initiatives, including a customized shopping space -- called Your Shop -- geared toward the user's own interests. The company unveiled other features as well that that allow users to more easily purchase items from merchants.
Pinterest stock is a bargain right now
The user losses had the market concerned, which has driven the stock price down 71% off its high. That has created an opportunity for long-term investors to buy Pinterest stock at a price-to-free cash flow multiple of 23, the lowest ever in its young history as a public company. This opportunity may not be around for long, so it could be an excellent way to spend a gas rebate right now.
