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2021-04-20
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Pinterest Vs. Snapchat: The Better Buy
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":371639037,"tweetId":"371639037","gmtCreate":1618930265829,"gmtModify":1634289800292,"author":{"id":3581854579020344,"idStr":"3581854579020344","authorId":3581854579020344,"authorIdStr":"3581854579020344","name":"pjetan","avatar":"https://static.tigerbbs.com/0dbe4c402957fcc269723fb9e3c423c2","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":0,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>👍🏻</p></body></html>","htmlText":"<html><head></head><body><p>👍🏻</p></body></html>","text":"👍🏻","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/371639037","repostId":1103702089,"repostType":4,"repost":{"id":"1103702089","pubTimestamp":1618929003,"share":"https://www.laohu8.com/m/news/1103702089?lang=&edition=full","pubTime":"2021-04-20 22:30","market":"us","language":"en","title":"Pinterest Vs. Snapchat: The Better Buy","url":"https://stock-news.laohu8.com/highlight/detail?id=1103702089","media":"seekingalpha","summary":"Summary\n\nPinterest and Snapchat both make money through advertising revenue and are beneficiaries of","content":"<p><b>Summary</b></p>\n<ul>\n <li>Pinterest and Snapchat both make money through advertising revenue and are beneficiaries of stay-at-home orders due to COVID-19.</li>\n <li>With both companies' stock prices appreciating substantially over the last year, I discuss which company is the better buy currently.</li>\n <li>Based on an analysis of management, business, financials, and valuation, I believe Pinterest is the better buy at this point for long-term investors.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/88d798a7a84be97e721371955d4144b8\" tg-width=\"1536\" tg-height=\"1025\"><span>Photo by stockcam/iStock Unreleased via Getty Images</span></p>\n<p>There is no doubt Facebook (FB) and Google (GOOGL) are the top dogs in advertising. This article is meant to explore and compare two smaller players: Pinterest (PINS) and Snapchat (SNAP). Both companies make money largely through advertising revenue. I've written about Pinterestpreviouslyand why Social Commerce can make Pinterest much bigger than it is today. However, Snapchat is also a beneficiary of the social commerce secular trend. Both companies have performed tremendously well over the last year with help from stay-at-home orders due to COVID-19. PINS has returned ~350% while SNAP has returned ~370% compared to S&P 500 return of ~52%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2cfd774b5c2871263dddcaed26d47eff\" tg-width=\"640\" tg-height=\"201\"><span>Source - data as of 4/19/2021 market close</span></p>\n<p>With this article I'll break down how the two companies' management compare, then take a look at the business, financials, and end with a valuation comparison to make an assessment on which company is the better buy today.</p>\n<p><b>Mission & Management</b></p>\n<p>One can tell a lot about a company based on their mission, especially when comparing two companies. The mission is what a company aligns its employees to, defines its culture, and can show managements' vision. Pinterest identifies itself as a visual discovery engine while Snapchat identifies itself as a camera company.</p>\n<p><img src=\"https://static.tigerbbs.com/35ffbd5833b72a64ea90b69dde9227a2\" tg-width=\"906\" tg-height=\"410\"></p>\n<p>Pinterest's mission is broader, shorter, and easier to remember. Snapchat's mission is narrower, longer, and sort of boxes itself in by stating it's just an app. Is one better than the other? Not necessarily. Some might find Pinterest's mission more appealing and inspirational while others might like Snapchat's focus.</p>\n<p>This matters because of how people feel about the mission, culture, and management of the company can drive longer-term results. One of the most important qualitative factors in an investment is how well management can execute on its vision. Glassdoor provides a tangible view into how employees feel about the company and its CEO.</p>\n<p><img src=\"https://static.tigerbbs.com/c028d47766dd2eca28ced9d58a5bf565\" tg-width=\"560\" tg-height=\"157\"></p>\n<p>Both companies are founder-led and that bodes well as shown by a Bain & Company study. Snapchat has a lower number of reviews than Pinterest but has the same rating of 4.1. Where the difference lies is in the rating of the CEO with Pinterest coming out on top with a score of 93% for Ben Silbermann versus a score of 88% for Evan Spiegel.</p>\n<p><b>Business</b></p>\n<p>Next, let's take a look at the important business metrics. Acquiring users and increasing revenue per user is instrumental to both companies making money. Both companies have users domestically in the U.S and internationally. It's important to note that Snapchat identifies users in 3 buckets: North America (including Mexico, the Caribbean, and Central America), Europe, and Rest of the World. For the purposes of this analysis I've labeled North America users as U.S and Europe and Rest of the World as international to better align with Pinterest's definitions.</p>\n<p></p>\n<table>\n <colgroup></colgroup>\n <tbody>\n <tr>\n <td><b>Pinterest</b></td>\n <td><b>Snapchat</b></td>\n </tr>\n <tr>\n <td><b>Metrics</b></td>\n <td><b>4Q19</b></td>\n <td><b>1Q20</b></td>\n <td><b>2Q20</b></td>\n <td><b>3Q20</b></td>\n <td><b>4Q20</b></td>\n <td><b>4Q19</b></td>\n <td><b>1Q20</b></td>\n <td><b>2Q20</b></td>\n <td><b>3Q20</b></td>\n <td><b>4Q20</b></td>\n </tr>\n <tr>\n <td>Monthly or Daily Average Users (Global)</td>\n <td>335</td>\n <td>367</td>\n <td>416</td>\n <td>442</td>\n <td>459</td>\n <td>218</td>\n <td>229</td>\n <td>238</td>\n <td>249</td>\n <td>265</td>\n </tr>\n <tr>\n <td>Growth (YoY)</td>\n <td>26%</td>\n <td>26%</td>\n <td>39%</td>\n <td>37%</td>\n <td>37%</td>\n <td>17%</td>\n <td>21%</td>\n <td>17%</td>\n <td>19%</td>\n <td>22%</td>\n </tr>\n <tr>\n <td>Monthly or Daily Average Users (U.S)</td>\n <td>88</td>\n <td>90</td>\n <td>96</td>\n <td>98</td>\n <td>98</td>\n <td>86</td>\n <td>88</td>\n <td>90</td>\n <td>90</td>\n <td>92</td>\n </tr>\n <tr>\n <td>Growth (YoY)</td>\n <td>7%</td>\n <td>6%</td>\n <td>13%</td>\n <td>13%</td>\n <td>11%</td>\n <td>9%</td>\n <td>10%</td>\n <td>8%</td>\n <td>7%</td>\n <td>7%</td>\n </tr>\n <tr>\n <td>Monthly or Daily Average Users (International)</td>\n <td>247</td>\n <td>277</td>\n <td>321</td>\n <td>343</td>\n <td>361</td>\n <td>131</td>\n <td>141</td>\n <td>148</td>\n <td>159</td>\n <td>173</td>\n </tr>\n <tr>\n <td>Growth (YoY)</td>\n <td>34%</td>\n <td>34%</td>\n <td>49%</td>\n <td>46%</td>\n <td>46%</td>\n <td>22%</td>\n <td>28%</td>\n <td>23%</td>\n <td>26%</td>\n <td>32%</td>\n </tr>\n <tr></tr>\n <tr>\n <td>Average Revenue Per User (Global)</td>\n <td>$1.22</td>\n <td>$0.77</td>\n <td>$0.70</td>\n <td>$1.03</td>\n <td>$1.57</td>\n <td>$2.58</td>\n <td>$2.02</td>\n <td>$1.91</td>\n <td>$2.73</td>\n <td>$3.44</td>\n </tr>\n <tr>\n <td>Growth (YoY)</td>\n <td>15%</td>\n <td>5%</td>\n <td>-20%</td>\n <td>14%</td>\n <td>29%</td>\n <td>23%</td>\n <td>20%</td>\n <td>0%</td>\n <td>29%</td>\n <td>33%</td>\n </tr>\n <tr>\n <td>Average Revenue Per User (U.S)</td>\n <td>$4.00</td>\n <td>$2.66</td>\n <td>$2.50</td>\n <td>$3.85</td>\n <td>$5.94</td>\n <td>$4.42</td>\n <td>$3.57</td>\n <td>$3.40</td>\n <td>$5.49</td>\n <td>$7.19</td>\n </tr>\n <tr>\n <td>Growth (YoY)</td>\n <td>27%</td>\n <td>18%</td>\n <td>-11%</td>\n <td>31%</td>\n <td>49%</td>\n <td>31%</td>\n <td>27%</td>\n <td>8%</td>\n <td>46%</td>\n <td>63%</td>\n </tr>\n <tr>\n <td>Average Revenue Per User (International)</td>\n <td>$0.21</td>\n <td>$0.13</td>\n <td>$0.14</td>\n <td>$0.21</td>\n <td>$0.35</td>\n <td>$2.72</td>\n <td>$2.09</td>\n <td>$1.99</td>\n <td>$2.38</td>\n <td>$3.02</td>\n </tr>\n <tr>\n <td>Growth (YoY)</td>\n <td>133%</td>\n <td>63%</td>\n <td>27%</td>\n <td>62%</td>\n <td>67%</td>\n <td>19%</td>\n <td>20%</td>\n <td>-7%</td>\n <td>16%</td>\n <td>11%</td>\n </tr>\n </tbody>\n</table>\n<p>Source - Author (using data from Earnings Reports and 10-Ks)</p>\n<p>As of 4Q20, Pinterest had 459M Monthly Active Users globally compared to Snapchat's 265M Daily Active Users. Pinterest has been able to grow its user base faster with a lot of the growth coming from international users with Snapchat lagging behind Pinterest in International users more so than U.S users. On the other hand, Snapchat has been able to monetize its user base much better than Pinterest domestically and internationally with Average Revenue Per User of $3.44 globally compared to Pinterest's $1.57 as of 4Q20. Where Pinterest really lags behind is international ARPU at a meager $0.35 compared to Snapchat's $3.02 as of 4Q20.</p>\n<p>The goal of both companies is to maintain and grow both users and ARPU, but for them to make money, advertisers have to choose the platform to advertise on. In this regard, Pinterest is slightly ahead with 35.8% of U.S marketers likely to market on Pinterest compared to 32.7% on Snapchat. For Snapchat, the challenge is to grow its user base faster and maintain or continue to grow its ARPU. Pinterest needs to maintain and grow its user base and capitalize on the opportunity to grow ARPU, especially internationally. It can be easier to increase ARPU than acquire new users but if management of both companies can execute, they are likely to become much bigger companies than today.</p>\n<p><img src=\"https://static.tigerbbs.com/4ab459b2a1fb526cda5060e737a13c6a\" tg-width=\"706\" tg-height=\"593\"></p>\n<p>Where things get even more interesting is user preferences on these platforms. Users are far more likely to shop on Pinterest than they are on Snapchat as Pinterest's user base is more female and particularly moms looking to buy things. This could prompt advertisers to prefer Pinterest over Snapchat.</p>\n<p><img src=\"https://static.tigerbbs.com/3036f1c105ddfbb8eea2501a85efb6ef\" tg-width=\"473\" tg-height=\"370\"></p>\n<p><b>Financials</b></p>\n<p>Starting with the income statement, Pinterest earned less revenue in every quarter over the last year than Snapchat, primarily due to Snapchat's higher ARPU as discussed above. However, Pinterest's gross profit was slightly higher in 4Q20 at $577M compared to $526M due to an 82% gross profit margin compared to Snapchat's 58%. The trend continues with Operating Income coming in higher for Pinterest for all quarters and even turning positive in 4Q20 at $205M mainly due to lower R&D and SG&A expenses than Snapchat. The bottom line reflects the same trend.</p>\n<table>\n <colgroup></colgroup>\n <tbody>\n <tr>\n <td><p><i>$ in Millions</i></p></td>\n <td><p><b>Pinterest</b></p></td>\n <td><p><b>Snapchat</b></p></td>\n </tr>\n <tr>\n <td><p><b>Income Statement Metrics</b></p></td>\n <td><p><b>4Q19</b></p></td>\n <td><p><b>1Q20</b></p></td>\n <td><p><b>2Q20</b></p></td>\n <td><p><b>3Q20</b></p></td>\n <td><p><b>4Q20</b></p></td>\n <td><p><b>4Q19</b></p></td>\n <td><p><b>1Q20</b></p></td>\n <td><p><b>2Q20</b></p></td>\n <td><p><b>3Q20</b></p></td>\n <td><p><b>4Q20</b></p></td>\n </tr>\n <tr>\n <td><p>Revenue ($)</p></td>\n <td><p>400</p></td>\n <td><p>272</p></td>\n <td><p>272</p></td>\n <td><p>443</p></td>\n <td><p>706</p></td>\n <td><p>561</p></td>\n <td><p>462</p></td>\n <td><p>454</p></td>\n <td><p>679</p></td>\n <td><p>911</p></td>\n </tr>\n <tr>\n <td><p>Growth (YoY)</p></td>\n <td><p>46%</p></td>\n <td><p>35%</p></td>\n <td><p>4%</p></td>\n <td><p>58%</p></td>\n <td><p>76%</p></td>\n <td><p>44%</p></td>\n <td><p>44%</p></td>\n <td><p>17%</p></td>\n <td><p>52%</p></td>\n <td><p>62%</p></td>\n </tr>\n <tr>\n <td><p>Gross Profit ($)</p></td>\n <td><p>304</p></td>\n <td><p>173</p></td>\n <td><p>164</p></td>\n <td><p>330</p></td>\n <td><p>577</p></td>\n <td><p>307</p></td>\n <td><p>209</p></td>\n <td><p>204</p></td>\n <td><p>386</p></td>\n <td><p>526</p></td>\n </tr>\n <tr>\n <td><p>Growth (YoY)</p></td>\n <td><p>48%</p></td>\n <td><p>35%</p></td>\n <td><p>5%</p></td>\n <td><p>68%</p></td>\n <td><p>90%</p></td>\n <td><p>73%</p></td>\n <td><p>79%</p></td>\n <td><p>18%</p></td>\n <td><p>73%</p></td>\n <td><p>71%</p></td>\n </tr>\n <tr>\n <td><p>Operating Income ($)</p></td>\n <td><p>-43</p></td>\n <td><p>-146</p></td>\n <td><p>-105</p></td>\n <td><p>-8</p></td>\n <td><p>205</p></td>\n <td><p>-154</p></td>\n <td><p>-286</p></td>\n <td><p>-311</p></td>\n <td><p>-168</p></td>\n <td><p>-87</p></td>\n </tr>\n <tr>\n <td><p>Growth (YoY)</p></td>\n <td><p>-198%</p></td>\n <td><p>-224%</p></td>\n <td><p>91%</p></td>\n <td><p>94%</p></td>\n <td><p>577%</p></td>\n <td><p>-22%</p></td>\n <td><p>9%</p></td>\n <td><p>-2%</p></td>\n <td><p>27%</p></td>\n <td><p>44%</p></td>\n </tr>\n <tr>\n <td><p>Net Income ($)</p></td>\n <td><p>-36</p></td>\n <td><p>-141</p></td>\n <td><p>-101</p></td>\n <td><p>-94</p></td>\n <td><p>208</p></td>\n <td><p>-241</p></td>\n <td><p>-306</p></td>\n <td><p>-326</p></td>\n <td><p>-200</p></td>\n <td><p>-113</p></td>\n </tr>\n <tr>\n <td><p>Growth (YoY)</p></td>\n <td><p>-177%</p></td>\n <td><p>-244%</p></td>\n <td><p>91%</p></td>\n <td><p>25%</p></td>\n <td><p>678%</p></td>\n <td><p>-26%</p></td>\n <td><p>1%</p></td>\n <td><p>-28%</p></td>\n <td><p>12%</p></td>\n <td><p>53%</p></td>\n </tr>\n </tbody>\n</table>\n<p>Source - Author (using data from Seeking Alpha)</p>\n<p>Despite lower revenue than Snapchat, Pinterest is making more money on the bottom line due to expense management as the company turned profitable in 4Q20. Snapchat is not even close to profitability and that trend could continue for a while as they continuously invest in themselves. If Pinterest can grow its ARPU while keeping its gross profit margin high like it has done so far, it will benefit the bottom line significantly.</p>\n<p>Moving onto the balance sheet, the main takeaway here is that Pinterest has much lower debt compared to Snapchat and more than enough cash to cover anything that might come the company's way. The same can't be said for Snapchat as its debt keeps mounting up.</p>\n<table>\n <colgroup></colgroup>\n <tbody>\n <tr>\n <td><p><i>$ in Millions</i></p></td>\n <td><p><b>Pinterest</b></p></td>\n <td><p><b>Snapchat</b></p></td>\n </tr>\n <tr>\n <td><p><b>Balance Sheet Metrics</b></p></td>\n <td><p><b>4Q19</b></p></td>\n <td><p><b>1Q20</b></p></td>\n <td><p><b>2Q20</b></p></td>\n <td><p><b>3Q20</b></p></td>\n <td><p><b>4Q20</b></p></td>\n <td><p><b>4Q19</b></p></td>\n <td><p><b>1Q20</b></p></td>\n <td><p><b>2Q20</b></p></td>\n <td><p><b>3Q20</b></p></td>\n <td><p><b>4Q20</b></p></td>\n </tr>\n <tr>\n <td><p>Total Cash and Short-Term Investments ($)</p></td>\n <td><p>1,713</p></td>\n <td><p>1,737</p></td>\n <td><p>1,703</p></td>\n <td><p>1,649</p></td>\n <td><p>1,760</p></td>\n <td><p>2,113</p></td>\n <td><p>2,082</p></td>\n <td><p>2,830</p></td>\n <td><p>2,725</p></td>\n <td><p>2,538</p></td>\n </tr>\n <tr>\n <td><p>Total Debt</p></td>\n <td><p>220</p></td>\n <td><p>158</p></td>\n <td><p>151</p></td>\n <td><p>150</p></td>\n <td><p>183</p></td>\n <td><p>1,237</p></td>\n <td><p>1,233</p></td>\n <td><p>1,947</p></td>\n <td><p>1,978</p></td>\n <td><p>2,004</p></td>\n </tr>\n <tr>\n <td><p>Total Assets ($)</p></td>\n <td><p>2,393</p></td>\n <td><p>2,289</p></td>\n <td><p>2,250</p></td>\n <td><p>2,301</p></td>\n <td><p>2,609</p></td>\n <td><p>4,012</p></td>\n <td><p>3,899</p></td>\n <td><p>4,704</p></td>\n <td><p>4,818</p></td>\n <td><p>5,024</p></td>\n </tr>\n <tr>\n <td><p>Total Liabilities ($)</p></td>\n <td><p>370</p></td>\n <td><p>350</p></td>\n <td><p>343</p></td>\n <td><p>366</p></td>\n <td><p>367</p></td>\n <td><p>1,752</p></td>\n <td><p>1,774</p></td>\n <td><p>2,509</p></td>\n <td><p>2,619</p></td>\n <td><p>2,694</p></td>\n </tr>\n <tr>\n <td><p>Total Equity ($)</p></td>\n <td><p>2,023</p></td>\n <td><p>1,939</p></td>\n <td><p>1,907</p></td>\n <td><p>1,935</p></td>\n <td><p>2,242</p></td>\n <td><p>2,260</p></td>\n <td><p>2,125</p></td>\n <td><p>2,195</p></td>\n <td><p>2,199</p></td>\n <td><p>2,330</p></td>\n </tr>\n </tbody>\n</table>\n<p><b>Valuation</b></p>\n<p>Not only is Pinterest growing revenue faster but also boasts a higher gross profit margin. In addition, Pinterest trades below Snapchat based on Next Twelve Months EV/Sales and EV/EBITDA multiples. Despite the huge run up in prices of both companies over the last year, it's much easier to make a case for Pinterest over Snapchat based on valuation at this point in time.</p>\n<p>Pinterest and Snapchat Quarterly Revenue Growth</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5f386c9ea9d175414c7b15f1f6b6ab9e\" tg-width=\"1280\" tg-height=\"645\"><span>Source - data as of 4/19/2021 market close</span></p>\n<p>Pinterest and Snapchat Quarterly Gross Profit Margin</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f0b9495f088ccdbe3775625669d4c35c\" tg-width=\"1280\" tg-height=\"644\"><span>Source- data as of 4/19/2021 market close</span></p>\n<p>Pinterest and Snapchat NTM EV/Sales</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/962b614c5a1677af1b02024ecc3934e9\" tg-width=\"1280\" tg-height=\"642\"><span>Source- data as of 4/19/2021 market close</span></p>\n<p>Pinterest and Snapchat NTM EV/EBITDA</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cd7281975acf8dd6b204add659bc7b34\" tg-width=\"1280\" tg-height=\"645\"><span>Source- data as of 4/19/2021 market close</span></p>\n<p><b>Conclusion</b></p>\n<p>Pinterest is a better managed company based on Glassdoor and that is reflected on the balance sheet with little to no debt. It is also a better platform for advertisers to target due to users' shopping preferences, has a runway ahead to monetize ARPU (especially internationally), and is currently valued much favorably compared to Snapchat. As a long-term investor if I had to choose one company, I would choose Pinterest.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Pinterest Vs. Snapchat: The Better Buy</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPinterest Vs. Snapchat: The Better Buy\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 22:30 GMT+8 <a href=https://seekingalpha.com/article/4419994-pinterest-vs-snapchat-the-better-buy><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nPinterest and Snapchat both make money through advertising revenue and are beneficiaries of stay-at-home orders due to COVID-19.\nWith both companies' stock prices appreciating substantially ...</p>\n\n<a href=\"https://seekingalpha.com/article/4419994-pinterest-vs-snapchat-the-better-buy\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"PINS":"Pinterest, Inc.","SNAP":"Snap Inc"},"source_url":"https://seekingalpha.com/article/4419994-pinterest-vs-snapchat-the-better-buy","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1103702089","content_text":"Summary\n\nPinterest and Snapchat both make money through advertising revenue and are beneficiaries of stay-at-home orders due to COVID-19.\nWith both companies' stock prices appreciating substantially over the last year, I discuss which company is the better buy currently.\nBased on an analysis of management, business, financials, and valuation, I believe Pinterest is the better buy at this point for long-term investors.\n\nPhoto by stockcam/iStock Unreleased via Getty Images\nThere is no doubt Facebook (FB) and Google (GOOGL) are the top dogs in advertising. This article is meant to explore and compare two smaller players: Pinterest (PINS) and Snapchat (SNAP). Both companies make money largely through advertising revenue. I've written about Pinterestpreviouslyand why Social Commerce can make Pinterest much bigger than it is today. However, Snapchat is also a beneficiary of the social commerce secular trend. Both companies have performed tremendously well over the last year with help from stay-at-home orders due to COVID-19. PINS has returned ~350% while SNAP has returned ~370% compared to S&P 500 return of ~52%.\nSource - data as of 4/19/2021 market close\nWith this article I'll break down how the two companies' management compare, then take a look at the business, financials, and end with a valuation comparison to make an assessment on which company is the better buy today.\nMission & Management\nOne can tell a lot about a company based on their mission, especially when comparing two companies. The mission is what a company aligns its employees to, defines its culture, and can show managements' vision. Pinterest identifies itself as a visual discovery engine while Snapchat identifies itself as a camera company.\n\nPinterest's mission is broader, shorter, and easier to remember. Snapchat's mission is narrower, longer, and sort of boxes itself in by stating it's just an app. Is one better than the other? Not necessarily. Some might find Pinterest's mission more appealing and inspirational while others might like Snapchat's focus.\nThis matters because of how people feel about the mission, culture, and management of the company can drive longer-term results. One of the most important qualitative factors in an investment is how well management can execute on its vision. Glassdoor provides a tangible view into how employees feel about the company and its CEO.\n\nBoth companies are founder-led and that bodes well as shown by a Bain & Company study. Snapchat has a lower number of reviews than Pinterest but has the same rating of 4.1. Where the difference lies is in the rating of the CEO with Pinterest coming out on top with a score of 93% for Ben Silbermann versus a score of 88% for Evan Spiegel.\nBusiness\nNext, let's take a look at the important business metrics. Acquiring users and increasing revenue per user is instrumental to both companies making money. Both companies have users domestically in the U.S and internationally. It's important to note that Snapchat identifies users in 3 buckets: North America (including Mexico, the Caribbean, and Central America), Europe, and Rest of the World. For the purposes of this analysis I've labeled North America users as U.S and Europe and Rest of the World as international to better align with Pinterest's definitions.\n\n\n\n\n\nPinterest\nSnapchat\n\n\nMetrics\n4Q19\n1Q20\n2Q20\n3Q20\n4Q20\n4Q19\n1Q20\n2Q20\n3Q20\n4Q20\n\n\nMonthly or Daily Average Users (Global)\n335\n367\n416\n442\n459\n218\n229\n238\n249\n265\n\n\nGrowth (YoY)\n26%\n26%\n39%\n37%\n37%\n17%\n21%\n17%\n19%\n22%\n\n\nMonthly or Daily Average Users (U.S)\n88\n90\n96\n98\n98\n86\n88\n90\n90\n92\n\n\nGrowth (YoY)\n7%\n6%\n13%\n13%\n11%\n9%\n10%\n8%\n7%\n7%\n\n\nMonthly or Daily Average Users (International)\n247\n277\n321\n343\n361\n131\n141\n148\n159\n173\n\n\nGrowth (YoY)\n34%\n34%\n49%\n46%\n46%\n22%\n28%\n23%\n26%\n32%\n\n\n\nAverage Revenue Per User (Global)\n$1.22\n$0.77\n$0.70\n$1.03\n$1.57\n$2.58\n$2.02\n$1.91\n$2.73\n$3.44\n\n\nGrowth (YoY)\n15%\n5%\n-20%\n14%\n29%\n23%\n20%\n0%\n29%\n33%\n\n\nAverage Revenue Per User (U.S)\n$4.00\n$2.66\n$2.50\n$3.85\n$5.94\n$4.42\n$3.57\n$3.40\n$5.49\n$7.19\n\n\nGrowth (YoY)\n27%\n18%\n-11%\n31%\n49%\n31%\n27%\n8%\n46%\n63%\n\n\nAverage Revenue Per User (International)\n$0.21\n$0.13\n$0.14\n$0.21\n$0.35\n$2.72\n$2.09\n$1.99\n$2.38\n$3.02\n\n\nGrowth (YoY)\n133%\n63%\n27%\n62%\n67%\n19%\n20%\n-7%\n16%\n11%\n\n\n\nSource - Author (using data from Earnings Reports and 10-Ks)\nAs of 4Q20, Pinterest had 459M Monthly Active Users globally compared to Snapchat's 265M Daily Active Users. Pinterest has been able to grow its user base faster with a lot of the growth coming from international users with Snapchat lagging behind Pinterest in International users more so than U.S users. On the other hand, Snapchat has been able to monetize its user base much better than Pinterest domestically and internationally with Average Revenue Per User of $3.44 globally compared to Pinterest's $1.57 as of 4Q20. Where Pinterest really lags behind is international ARPU at a meager $0.35 compared to Snapchat's $3.02 as of 4Q20.\nThe goal of both companies is to maintain and grow both users and ARPU, but for them to make money, advertisers have to choose the platform to advertise on. In this regard, Pinterest is slightly ahead with 35.8% of U.S marketers likely to market on Pinterest compared to 32.7% on Snapchat. For Snapchat, the challenge is to grow its user base faster and maintain or continue to grow its ARPU. Pinterest needs to maintain and grow its user base and capitalize on the opportunity to grow ARPU, especially internationally. It can be easier to increase ARPU than acquire new users but if management of both companies can execute, they are likely to become much bigger companies than today.\n\nWhere things get even more interesting is user preferences on these platforms. Users are far more likely to shop on Pinterest than they are on Snapchat as Pinterest's user base is more female and particularly moms looking to buy things. This could prompt advertisers to prefer Pinterest over Snapchat.\n\nFinancials\nStarting with the income statement, Pinterest earned less revenue in every quarter over the last year than Snapchat, primarily due to Snapchat's higher ARPU as discussed above. However, Pinterest's gross profit was slightly higher in 4Q20 at $577M compared to $526M due to an 82% gross profit margin compared to Snapchat's 58%. The trend continues with Operating Income coming in higher for Pinterest for all quarters and even turning positive in 4Q20 at $205M mainly due to lower R&D and SG&A expenses than Snapchat. The bottom line reflects the same trend.\n\n\n\n\n$ in Millions\nPinterest\nSnapchat\n\n\nIncome Statement Metrics\n4Q19\n1Q20\n2Q20\n3Q20\n4Q20\n4Q19\n1Q20\n2Q20\n3Q20\n4Q20\n\n\nRevenue ($)\n400\n272\n272\n443\n706\n561\n462\n454\n679\n911\n\n\nGrowth (YoY)\n46%\n35%\n4%\n58%\n76%\n44%\n44%\n17%\n52%\n62%\n\n\nGross Profit ($)\n304\n173\n164\n330\n577\n307\n209\n204\n386\n526\n\n\nGrowth (YoY)\n48%\n35%\n5%\n68%\n90%\n73%\n79%\n18%\n73%\n71%\n\n\nOperating Income ($)\n-43\n-146\n-105\n-8\n205\n-154\n-286\n-311\n-168\n-87\n\n\nGrowth (YoY)\n-198%\n-224%\n91%\n94%\n577%\n-22%\n9%\n-2%\n27%\n44%\n\n\nNet Income ($)\n-36\n-141\n-101\n-94\n208\n-241\n-306\n-326\n-200\n-113\n\n\nGrowth (YoY)\n-177%\n-244%\n91%\n25%\n678%\n-26%\n1%\n-28%\n12%\n53%\n\n\n\nSource - Author (using data from Seeking Alpha)\nDespite lower revenue than Snapchat, Pinterest is making more money on the bottom line due to expense management as the company turned profitable in 4Q20. Snapchat is not even close to profitability and that trend could continue for a while as they continuously invest in themselves. If Pinterest can grow its ARPU while keeping its gross profit margin high like it has done so far, it will benefit the bottom line significantly.\nMoving onto the balance sheet, the main takeaway here is that Pinterest has much lower debt compared to Snapchat and more than enough cash to cover anything that might come the company's way. The same can't be said for Snapchat as its debt keeps mounting up.\n\n\n\n\n$ in Millions\nPinterest\nSnapchat\n\n\nBalance Sheet Metrics\n4Q19\n1Q20\n2Q20\n3Q20\n4Q20\n4Q19\n1Q20\n2Q20\n3Q20\n4Q20\n\n\nTotal Cash and Short-Term Investments ($)\n1,713\n1,737\n1,703\n1,649\n1,760\n2,113\n2,082\n2,830\n2,725\n2,538\n\n\nTotal Debt\n220\n158\n151\n150\n183\n1,237\n1,233\n1,947\n1,978\n2,004\n\n\nTotal Assets ($)\n2,393\n2,289\n2,250\n2,301\n2,609\n4,012\n3,899\n4,704\n4,818\n5,024\n\n\nTotal Liabilities ($)\n370\n350\n343\n366\n367\n1,752\n1,774\n2,509\n2,619\n2,694\n\n\nTotal Equity ($)\n2,023\n1,939\n1,907\n1,935\n2,242\n2,260\n2,125\n2,195\n2,199\n2,330\n\n\n\nValuation\nNot only is Pinterest growing revenue faster but also boasts a higher gross profit margin. In addition, Pinterest trades below Snapchat based on Next Twelve Months EV/Sales and EV/EBITDA multiples. Despite the huge run up in prices of both companies over the last year, it's much easier to make a case for Pinterest over Snapchat based on valuation at this point in time.\nPinterest and Snapchat Quarterly Revenue Growth\nSource - data as of 4/19/2021 market close\nPinterest and Snapchat Quarterly Gross Profit Margin\nSource- data as of 4/19/2021 market close\nPinterest and Snapchat NTM EV/Sales\nSource- data as of 4/19/2021 market close\nPinterest and Snapchat NTM EV/EBITDA\nSource- data as of 4/19/2021 market close\nConclusion\nPinterest is a better managed company based on Glassdoor and that is reflected on the balance sheet with little to no debt. It is also a better platform for advertisers to target due to users' shopping preferences, has a runway ahead to monetize ARPU (especially internationally), and is currently valued much favorably compared to Snapchat. As a long-term investor if I had to choose one company, I would choose Pinterest.","news_type":1},"isVote":1,"tweetType":1,"viewCount":336,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/371639037"}
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