Key insights
- The author analyzes recent earnings from SNAP, PYPL, and PINS, noting diverging performance. Pinterest is highlighted as a strong performer with solid financials, while PayPal faces restructuring and competition. Snap is seen as a trading vehicle due to debt and market sensitivity. The author expresses surprise that Pinterest is the only stock rated a 'Buy' by analysts, suggesting potential undervaluation.
These three still get grouped together as “busted 2021 growth stocks,” but after this week’s earnings they barely look comparable anymore.
Pinterest is quietly becoming a very real business.
Just crossed $1B quarterly revenue for the first time. Revenue up 18% YoY. Nearly debt-free. ~80% gross margins. Generates real cash flow. Yet the stock is still down ~20% YTD and nobody seems to care.
PayPal is the strange one.
Beat Q1 estimates, then dropped anyway because guidance disappointed and the new CEO is restructuring aggressively. But the stock trades around 8.4x earnings while still producing billions in profit and FCF annually.
The bear case is obvious: branded checkout growth is weak and Apple Pay/Shop Pay competition is real.
But at what point is the pessimism already fully priced in?
Then there’s Snap.
Revenue growth was actually decent at 12%, but they still lost money this quarter and are now pushing another major cost restructuring to reach profitability. Balance sheet isn’t disastrous, but with high debt and a beta above 2, this thing gets destroyed anytime markets turn risk-off.
Feels more like a trading vehicle than a long-term compounder.
What surprised me most is that the only one analysts currently rate a Buy is PINS.
Honestly… probably deserved.