What happened
Week to date, Pinterest (PINS 1.63%) stock was up 10% as of 11:13 a.m. ET on Friday, according to data provided by S&P Global Market Intelligence.
Pinterest outperformed the Nasdaq Composite and social media stocks Snap and Meta Platforms. At the end of April, Pinterest reported better-than-expected first-quarter earnings, which caused at least a temporary shift in investor sentiment.
So what
Pinterest might be the better social media stock to buy right now. Snap and Meta Platforms' Facebook have faced headwinds from advertisers pulling back on spending, in addition to heightened competition hurting Facebook. Meta reported year-over-year revenue growth of just 7% in the first quarter. In its recent report, Snap said that advertising growth had started to slow in the first quarter.
The only challenge Pinterest has dealt with recently is user engagement. The company reported revenue growth of 18% over the year-ago quarter, driven by demand from advertisers. However, monthly active users of 433 million declined 9% year over year.
Image source: Getty Images.
Now what
One thing helping lift Pinterest stock right now is low expectations. Out of 36 Wall Street analysts who cover the stock, only 13 rate the shares a buy, with 22 giving the stock a neutral (or hold) rating, and one giving it a sell rating. Low expectations have driven Pinterest's valuation down to new lows this year, based on the price-to-sales ratio.
PINS PS Ratio data by YCharts
Heading into the first-quarter earnings report last week, analysts had been lowering their full-year revenue estimates. But after a better-than-expected quarter, investors might be looking at Pinterest as a relatively better value than other social media stocks in this uncertain economic environment.
