Pinterest Has A Smashing Week

Shares of Pinterest are up more than 17% over three sessions as good news has been piling up for the stock that everyone has been saying is undervalued, yet no one wanted to buy.

The rally began Tuesday after eMarketer.com released a report saying that Pinterest had become the third largest social media platform in the U.S. as its user base surpassed that of Snapchat. The firm reported Pinterest now boasts 82.4 million users versus 80.2 million for Snapchat.

eMarketer also reported Pinterest is growing nearly twice as fast as Snapchat. Shares of Pinterest jumped 9.6% on Tuesday in response. The reported also noted that Pinterest has an advantage due to its wide appeal across most age groups.

User growth is only part of the picture though. Pinterest also has plenty of room to improve its monetization, and that’s one factor that led Wells Fargo analyst Brian Fitzgerald to upgrade the stock from equal weight to overweight on Friday, while also raising his price target on the stock to $30.

Fitzgerald noted that given the strong growth in the user base, and the trend towards profitability, investors have greatly undervalued the stock.

Pinterest is looking like a good investment thanks to “healthy audience and engagement growth, strong revenue growth and solid progress toward profitability,” said Fitzgerald.

He also noted that the company’s monetization is currently weak, but improvements in the ad platform will address that in the coming year. There has also been a push towards international growth, with Pinterest hiring overseas sales staff. Taken together the stock is looking like a 2020 winner.