This Overlooked Growth Stock Is Absurdly Cheap Right Now
Written by Geoffrey Seiler for The Motley Fool -> Pinterest has transformed its platform from a simple online vision board to a shoppable discovery destination. The company has a perfect flywheel business for AI. One of the most overlooked growth stocks that is trading at an a
Pinterest has transformed its platform from a simple online vision board to a shoppable discovery destination.
One of the most overlooked growth stocks that is trading at an absurdly cheap valuation right now is Pinterest (NYSE: PINS) . The stock is down around 40% over the past year, despite continued strong revenue growth, a cheap valuation, and the backing of renowned activist investor Elliott Investment Management.
The stock's sell-off over the past year has left it trading at a forward price-to-earnings (P/E) ratio of just 11 times current-year estimates and below 9.5 times next year's consensus. This comes despite the company seeing 18% year-over-year (15% in constant currency) revenue growth in the first quarter, to over $1 billion.
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Over the past few years, the company has done a great job of repositioning its platform from a simple online vision board to a shoppable discovery destination. It has leaned into artificial intelligence (AI) features and become a leader in multimodal search capabilities, especially with visual searches. AI is also helping it improve the personalization and curation it delivers to its users.
At the same time, its AI-powered performance ad suite, Performance Plus, is helping advertisers automate marketing campaigns to optimize their ad spending. It can better target potential customers, improve bidding, and even help with AI image generation to improve a campaign's visuals.
The business has also been booming in international markets, with European revenue jumping 27% to $186 million and rest-of-world revenue surging 59% to $72 million in Q1 2026. The growth is coming from both an increase in monthly active users and higher average revenue per user (ARPU). Pinterest's international business continues to be under-monetized, and this remains a large opportunity for the company moving forward.
Elliott Investment Management gave Pinterest a big vote of confidence in early March when it bought $1 billion in convertible senior notes directly from the company. Elliott's notes have an initial conversion price of $22.72 and carry a modest 1.75% interest rate. Elliott also owns over $500 million in common stock. Pinterest used the proceeds from the convertible notes to immediately buy back its own shares as part of a $1 billion accelerated share repurchase (ASR) agreement. This was part of a new $3.5 billion share buyback program that it put in place.
