PINS
Pinterest, Inc.
$22.32
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 60.7% below fair value
You pay
$22.32
Bear
$32.12
Fair
$56.83
Bull
$84.39
Bear
$32.12
+43.9%
12% rev growth, 22% terminal margin
Fair
$56.83
+154.6%
20% rev growth, 29% terminal margin
Bull
$84.39
+278.1%
26% rev growth, 33% terminal margin
Adjust Assumptions
20.0%
29.0%
12.0%
Key Value Driver
Revenue growth (20%) × margin expansion to 29%
Terminal Value % of EV
54%
Implied Market Multiple
2.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (48 analysts)
$27.93
Divergence from AlphaVal
103%
Summary
Projecting 20% revenue growth with FCF margins expanding from 30% to 29% over 10 years, discounted at 12%, the base-case value is $56.83 per share.
Warnings
Stock-based employee pay is 21% of revenue — your ownership shrinks by about 2.0% each year as new shares are issued. Our estimate already accounts for this dilution.
Gross margin of 80% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $27.93 (from 48 analysts). Our estimate is 103% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep