Investors’ interest in Pinterest, a social media web company and mobile web application, piqued as it forecast opening itself to the public. However, there are many things to concern investors with regards to considering an investment.
Investors see Pinterest as an excellent avenue for advertisers, what with Pinterest primarily being linked from other more popular social networking applications and sites such as Facebook and YouTube.
Pinterest works much like a magazine catalog mixed with a typical social networking site where you can click and share posts with friends. Apart from other social media, Pinterest helps its users to discover information tailored to fit their click and enumerated interests.
An average of 184 million users flocked Pinterest in the fourth quarter; up from the 160 million users it had in 2017 and 90 million from the prior year. It has an average increase of 25% in revenue per user during 2018.
While Pinterest seems promising to new investors, it does not come without a red flag. This social media-catalog mix relies heavily on clicks through Facebook, which means the users’ usage of the app might start to change when Facebook changes its authentication system like it did last year.
Nevertheless, Pinterest seems promising and some analysts are calling its financials “pretty amazing.” The gross margin of the company increased from 46% in the year 2016 to 68% in 2018. Moreover, an increase from 58% in 2017 to 60% in 2018.
On Monday, Pinterest officials project growth in revenue of about 54% in the first quarter. It expects to sell around 75 million shares at $15 to $17 per share when it already goes public.