Chances of Pinterest (NYSE:PINS) to fall in November


USD 22.72  1.21  5.06%   

The stock is currently experiencing above-average trading activities. While some baby boomers are getting worried about communication services space, it is reasonable to sum up Pinterest as an investment alternative. We will analyze why Pinterest investors may still consider a stake in the business.
Published over two months ago
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The company currently holds 202.57 M in liabilities with Debt to Equity (D/E) ratio of 0.07, which may suggest Pinterest is not taking enough advantage from borrowing. Pinterest has a current ratio of 13.94, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Pinterest until it has trouble settling it off, either with new capital or with free cash flow. So, Pinterest's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Pinterest sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Pinterest to invest in growth at high rates of return. When we think about Pinterest's use of debt, we should always consider it together with cash and equity.
Pinterest financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Pinterest, including all of Pinterest's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Pinterest assets, the company is considered highly leveraged. Understanding the composition and structure of overall Pinterest debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Pinterest Total Liabilities

Pinterest liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Pinterest has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Pinterest balance sheet include debt obligations and money owed to different Pinterest vendors, workers, and loan providers. Below is the chart of Pinterest short long-term liabilities accounts currently reported on its balance sheet.
You can use Pinterest financial leverage analysis tool to get a better grip on understanding its financial position

How important is Pinterest's Liquidity

Pinterest financial leverage refers to using borrowed capital as a funding source to finance Pinterest ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Pinterest financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Pinterest's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Pinterest, but it might be worth checking our own buy vs. sell analysis

Breaking it down a bit more

The entity reported the previous year's revenue of 2.67 B. Net Income was 332.83 M with profit before overhead, payroll, taxes, and interest of 2.05 B.

Our Pinterest analysis connotes possible reversion in November

The jensen alpha is down to 0.53 as of today. Pinterest shows above-average downside volatility for the selected time horizon. We advise investors to inspect Pinterest further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Pinterest future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Pinterest's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Pinterest's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Current Takeaway on Pinterest Investment

While some firms under the internet content & information industry are still a bit expensive, Pinterest may offer a potential longer-term growth to retail investors. On the whole, as of the 5th of October 2022, we believe that Pinterest is currently undervalued with close to average probability of distress in the next two years. However, our latest 90 days buy-sell recommendation on the enterprise is Strong Sell.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Pinterest. Please refer to our Terms of Use for any information regarding our disclosure principles.

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