Pinterest (PINS -0.36%) stock soared after it became public that activist investment firm Elliott Management has reportedly taken a 9% stake in the company. Shares were up as much as 20% in after-hours trading when the news broke after the markets closed on July 14.

The market was excited about the potential for the skilled management firm to turn things around for Pinterest, which has struggled since the economic reopening gained momentum. With that backdrop, should investors jump in and buy Pinterest stock right now? Let's consider.

Pinterest has no shortage of suitors

Pinterest is a social media platform that is free to join and use. The company makes money by showing advertisements to users browsing its app. In that regard, user growth is crucial for its prospects. As of March 31, Pinterest boasted 433 million monthly active users, up by 2 million from the previous quarter. Before this quarter, Pinterest was on a streak of three consecutive quarters of user losses. The company is still on a four-quarter trend of user losses from its most lucrative region, North America.

PINS Revenue (Quarterly YoY Growth) Chart

PINS Revenue (Quarterly YoY Growth) data by YCharts.

To make matters worse, Pinterest faces headwinds, including Apple's (AAPL -1.00%) privacy policy changes (which complicate its ability to show targeted advertising), Russia's invasion of Ukraine, and the looming risks of a U.S. recession. Those forces are all working together to lower Pinterest's revenue growth, which has decelerated from a peak of 125% in Q2 2021 to 18% in Q1 2022. Management estimates revenue will grow by just 11% in the upcoming quarter.

In June, founder and CEO Ben Silbermann stepped down from his role as CEO. Now, Elliott Management has taken a 9% stake in the social media company and will likely aim to influence operations. Perhaps the experienced investing group has ideas it feels will turn things around amid the headwinds. Or it might believe that the shares were undervalued after falling 77% off their highs. Elliott Management has been in discussion with Pinterest over the past several weeks; however, the details of those talks have not been revealed.

Recall also that Paypal (PYPL 1.39%) tried to acquire Pinterest last year, but ultimately, the purchase fell through when PayPal's shareholders balked at the idea. All in all, the recent news of the activist purchase provides no real reason to buy Pinterest stock.

Pinterest stock was already a good value

PINS Price to Free Cash Flow Chart

PINS Price to Free Cash Flow data by YCharts.

That said, Pinterest's stock was already a good value before this recent news broke. The company trades at a low price-to-free cash flow ratio of 20.5, has grown revenue from $756 million to $2.6 billion in the last three years, and has a total addressable market of more than $750 billion. Those reasons, not the Elliott purchase, make Pinterest stock a buy although the activist's interest might be validation of its excellent value.