Pinterest (PINS -0.91%) is a curious company. It's typically categorized as a social networking platform, but it's nothing like more familiar social media sites such as Twitter or Meta's Facebook. Indeed, Pinterest doesn't facilitate any peer-to-peer communication to speak of. It's not even readily apparent how Pinterest makes money. (It's an advertising platform, by the way.)

And yet, for those investors who've kept close tabs on the company's ongoing evolution, Pinterest is a compelling five-year growth prospect. Here's what you need to know about why there's long-term upside in store.

Meet the new-and-improved Pinterest

As was noted, Pinterest is unlike anything else on the web. Users digitally "pin" pictures and web pages of things they have an "interest" in to a virtual bulletin board, and then publicly share their boards with other Pinterest users. Users can search for boards on specific topics; they'll see the occasional ad mixed in with their search results. As of the end of the quarter ending in March, 463 million people were regularly using the site.

This original business model was never the only one that could be utilized by this particular platform, though. Rather, it's always made sense for brands to self-manage their own Pinterest pages and engage with the platform's traffic in a way that drives more direct sales.

That's the gist of CEO Bill Ready's strategy anyway. And he would certainly know. Prior to taking the helm in June 2022, he served as president of Commerce, Payments, and Next Billion Users at Alphabet's Google. Prior to that he was the COO of digital payments pioneer PayPal. Clearly he's not just guessing as to what advertisers want, and what turns consumers into paying customers. He knows. 

Case(s) in point: In May of this year, the company unveiled the ability to turn any posted "pin" into a link to an advertiser's product sales page. That move follows October's release of tools allowing advertisers to identify the site's search trends, and then further refine those trends' results by demographic data.

The company's not just putting more powerful tools in advertiser's hands, however. It's also cultivating partnerships that were at one point unthinkable. In April the company announced a collaboration with e-commerce giant Amazon that will insert Pinterest's first third-party advertisements -- Amazon's, specifically -- into the site's search results. Other third-party advertisers could come into the fold in the future.

On the surface it sounds like Pinterest is stoking its competition. And in some ways, it is.

It's still better off using such an approach in the long run, though. As Wells Fargo analyst Ken Gawrelski said of his recent upgrade of the stock, this "outsourced monetization with early signs of progress on improved engagement and ad load should drive a materially stronger revenue and margin outlook for the company," and will ultimately "allow Pinterest to focus its resources on growing engagement and improving overall user experience."

5 years from now

But what might this top-down overhaul mean for the company five years from now?

Obviously, nobody has a crystal ball. The analyst community, however, expects these advertising enhancements to drive Pinterest's top line from last year's $2.8 billion to $5 billion by 2028. But the more bullish aspect of this strong sales growth projection is the profit growth that will take shape alongside it. The same analysts believe this year's likely per-share earnings of $0.79 will swell to $2.02 per share within five years.  

And, there's nothing about Pinterest's current long-term growth trajectory suggesting these expectations are out of line even if they've slowed of late. Gawrelski even highlights the "improving engagement trends and higher ad load" that sets the stage for "accelerating and above-consensus revenue growth."

PINS Revenue (Quarterly) Chart

PINS Revenue (Quarterly) data by YCharts

More difficult to predict is the company's user growth and per-user revenue. Even so, based on its current user growth and per-user revenue metrics, the platform could easily be serving in excess of 600 million regular users by 2028, who are worth more than $7 of annual revenue to the organization; that math roughly jibes with 2028's top-line expectation of $5 billion.

Perhaps of most interest to investors, though, is the stock's potential upside. Shares are already trading near their 12-month consensus price target of $29.07. However, longer-term and less-official price targets suggest the stock's price could exceed $50 by 2028.

For aggressive growth investors, it's worth the wait

Take any and all numerical outlooks with a grain of salt, of course. Nobody can truly know what the future holds. Pinterest is no exception. In fact, Pinterest's unique business model makes it particularly challenging to know just how much better it might be monetized going forward.

When you're stepping into any business as an investor or even a direct owner, however, you're also taking a leap of faith that the business's underlying principle is sound and that the operation can be profitably sustained. Pinterest at least checks off those boxes, even if the more finite expectations about its future results are only best guesses.

The kicker: If nothing else, sheer fatigue with the bickering that Twitter and Facebook seem to so easily facilitate these days could push people toward more casual, slightly less interactive social networking platforms.

Ready even recently commented, "We really think that positivity -- and particularly more positive outcomes in emotional well-being -- really needs to become a standard for the social media industry," suggesting he knows there's opportunity his company is uniquely positioned to capitalize on. 

Bottom line? The stock's recent rally limits its near-term upside. If you're willing to wait for a healthy pullback, though, Pinterest stock is a compelling long-term growth prospect for more aggressive investors.