Is Pinterest Stock a Long Term Opportunity After Recent 15% Slide in 2025?

• If you are wondering whether Pinterest at around $25.99 is quietly setting up a value opportunity or just another value trap, you are in the right place.
• Despite a choppy ride with returns of -2.8% over the last week, -2.4% over the last month, and a -15.0% drop year to date, the stock is still up 4.8% over three years, even though it sits about -63.1% below its five year level.
• Recently, investors have been reacting more to shifting sentiment around digital ad spending and the platform's ability to monetize its highly visual user base, rather than any single headline. That means price moves have as much to do with changing expectations about long term growth and profitability as they do with short term news flow.
• On our numbers, Pinterest scores a strong 6/6 valuation checks, which suggests it screens as undervalued across multiple metrics. Next, we will break down what those valuation approaches say and outline a more refined way to think about what the market is really pricing in.

Find out why Pinterest's -15.2% return over the last year is lagging behind its peers.

Approach 1: Pinterest Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and discounting those cash flows back to today in dollar terms. For Pinterest, the latest twelve months Free Cash Flow is about $1.13 billion. This provides a starting point for those projections.

The 2 Stage Free Cash Flow to Equity model used here combines analyst forecasts for the next few years with longer term extrapolations by Simply Wall St. Under this framework, Pinterest’s annual Free Cash Flow is projected to reach roughly $2.34 billion by 2035, based on the model’s assumptions.

When those future cash flows are discounted back, the model arrives at an intrinsic value estimate of about $51.32 per share. Versus the current share price near $25.99, the implied discount of roughly 49.4% indicates a gap between the market price and the value suggested by these cash flow assumptions.

Result: UNDERVALUED (model-based)

Our Discounted Cash Flow (DCF) analysis suggests Pinterest is undervalued by 49.4%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Pinterest.

Approach 2: Pinterest Price vs Earnings

For profitable companies like Pinterest, the price to earnings, or PE, ratio is a useful shorthand for how much investors are willing to pay today for each dollar of current earnings. It links the share price directly to the bottom line and makes it easier to compare businesses with different sizes and capital structures.

What counts as a normal PE depends on how fast earnings are expected to grow and how risky those earnings are. Higher growth and more predictable profits usually justify a higher multiple, while slower or more volatile earnings should trade on a lower one.

Pinterest currently trades on about 8.8x earnings, well below both the Interactive Media and Services industry average of roughly 17.4x and a much richer peer group average near 66.3x. Simply Wall St’s proprietary Fair Ratio for Pinterest is around 14.5x, which reflects its specific mix of earnings growth, margins, industry positioning, market cap and risk profile. This Fair Ratio is more informative than a simple peer or industry comparison because it adjusts for those company level factors rather than assuming one size fits all. Set against that 14.5x Fair Ratio, Pinterest’s 8.8x multiple suggests the market is still underpricing its earnings power.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Pinterest Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives, a simple framework on Simply Wall St's Community page that lets you connect your view of Pinterest's story to concrete forecasts for revenue, earnings and margins. You can then link these forecasts to an explicit Fair Value you can compare with the current share price to decide whether to buy, hold or sell. This all updates dynamically as new earnings or news arrives. For example, a more optimistic Pinterest Narrative might assume faster monetization, higher margins and a Fair Value around $42.63 per share. In contrast, a more cautious Narrative could lean toward slower growth, thinner margins and a Fair Value closer to $37.28. This shows how two reasonable perspectives on the same company can lead to different yet fully quantified investment decisions.

Do you think there's more to the story for Pinterest? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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