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Pinterest versus Twitter: Which Social Media Stock Has More Upside

Posted on Saturday, June 6th, 2020 by Sean Sechler

Pinterest versus Twitter: Which Social Media Stock Has More Upside

When you start to think about all of the significant ways that social media has changed our society, it’s hard to believe it has only been around for under two decades. Social media businesses are companies that have connected people from all over the world and provided entirely new ways for businesses to generate revenue. It will truly be fascinating to see where the social media space goes next, and there are two social media companies that appear to be undervalued in the stock market.

When you look at the growth potential for businesses like Pinterest and Twitter, it’s hard to believe they are trading where they currently are. We already have seen just how successful social media companies like Facebook (NASDAQ:FB) can become, which is why investors should be so intrigued by some of the smaller ones. Let’s take a more detailed look at both Pinterest and Twitter below and decide which social media stock has more upside at this time.

Pinterest (NYSE:PINS)

If you are looking for a social media business that has e-commerce exposure, a loyal user base, and huge growth potential, Pinterest is absolutely worth a look. Pinterest is a company that offers a unique platform when compared to other social media stocks. When someone logs onto Pinterest, they are looking to discover something new or gain inspiration. The visual-centric platform provides information on a ton of different topics in an aesthetically appealing way. You can find everything from delicious recipes to fashion advice all with the click of a mouse.

One of the downsides with Pinterest is that it still is working on building an advertising product suite that meshes well with its users. One could also argue that since most of Pinterest’s daily users are female, their market share is limited. However, Pinterest’s international growth and rising e-commerce revenue streams help to offset these downsides.

Pinterest’s unique approach to social media undeniably has a ton of potential if they can get their advertising revenue right, which is one of the big reasons investors should be interested. The social media company reported strong earnings in Q1 with 35% year-over-year revenue growth and year-over-year Global Monthly Active Users growth of 26%. If this company can continue increasing its users and improving relationships with major advertisers, the stock has room to run.

Twitter (NYSE:TWTR)

When you consider how powerful a single post from this social media platform can be, it’s hard to believe the stock is still trading close to its IPO price of $26 a share 5 years later. Although Twitter is a company that has made headlines for the wrong reasons lately including a public spat between CEO Jack Dorsey and President Trump, it’s a stock that should still be on your radar given the power and potential it’s platform.

If you aren’t familiar with Twitter, it is a “microblogging” social media platform that allows users to post and interact with messages that are known as tweets. The cool thing about Twitter is that breaking news happens instantly and a single tweet can have a massive impact on the world. Look no further than Elon Musk’s infamous “funding secured” tweet from back in August 2018 which sent the stock market into a frenzy to see just how much of an impact the platform can make.

The main problem for Twitter isn’t its user growth or potential, it’s the continued struggle to monetize the platform. Some believe that eccentric CEO Jack Dorsey is not the right man for growing the company, and he was almost ousted by the board of directors earlier in the year. With that said, the company reported its strongest ever year-over-year Monetizable Daily Active Usage growth as of the Q1 earnings report, which is a testament to just how ubiquitous the social media platform has become. If you are looking at Twitter as a long term investment, it’s easy to envision a scenario where the company gets acquired and gains a management team that solves the monetization issues.

Only One Winner

If you are interested in buying a social media company with a ton of upside potential, both of these companies are worth a look. However, Twitter is the one with the most upside given how influential it has become and its potential for future monetization. If Twitter can finally find an intelligent way to to increase advertising revenue streams without losing users, the sky is the limit. Although there are some short term risks due to recent headlines, don’t let that scare you away from investing in Twitter in the long run.

Companies Mentioned in This Article

CompanyBeat the Market™ RankCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Pinterest (PINS)1.2$27.00+4.4%N/A-8.54Hold$24.21
Facebook (FB)1.8$243.58+1.1%N/A33.37Buy$247.78
Twitter (TWTR)1.3$35.41+7.3%N/A21.86Hold$33.14

5 Travel Company Stocks Likely to Suffer From the Coronavirus

How important is the global travel and tourism industry? It’s a sector that accounts for about 10% of the world’s adult workforce. That’s 350 million people. The industry also accounts for at least 4% of the global gross domestic product (GDP).

In short, it’s an industry that accounts for trillions of dollars for the economy. And it relies on the most visible workers like pilots and cruise ship captains to the kitchen and housecleaning staff and servers. The travel industry is in many ways a service industry. But when there’s nobody to service, these businesses take a tumble.

And tumble it has. The world is going through a period of enforced social distancing. Many countries are taking even more extreme measures to lock down parts, or all, of their countries in an effort to contain the spread of the coronavirus and to flatten the curve to prevent healthcare workers and hospitals from being overwhelmed.

But that means fewer people are flying. Planned vacations are being canceled. And all of this is bad news for a sector that relies on the mobility of global travelers.

To be fair, the best of these companies should recover just fine. However, some of these companies had fundamental concerns that will be magnified by the loss of revenue.

View the "5 Travel Company Stocks Likely to Suffer From the Coronavirus".

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