2 battered profitable growth stocks to watch in October


Today’s video focuses on fundamentals, stock price movements, valuation metrics and recent news affecting Pinterest (NYSE: PINS) and Etsy (NASDAQ: ETSY). Here are some highlights from the video:

  1. On October 6, Pinterest announced a “Slideshow for Collections” feature, an easier way to reach and convert Pinterest buyers. Pinterest claims that buyers on its platform have 85% larger carts than buyers on other platforms and spend twice as much per month. The new functionality is a way for advertisers to encourage this greater shopping cart behavior. Pinterest’s stock price is down more than 40% from its 52-week closing high, which can be seen as a buying opportunity for long-term investors.
  2. This year, Etsy made two acquisitions to accelerate its growth in international markets and increase the number of products it offers. Depop, a fashion re-commerce marketplace, has accelerated Etsy’s expansion in the UK, US and Australia. El07, a company known as Etsy of Brazil, has accelerated Etsy’s growth in one of Latin America’s largest economies.
  3. In the video, I take a closer look at two valuation metrics, the forward price / sales ratio and the forward EV / EBITDA ratio. Historically, Pinterest tends to be more expensive in both proportions compared to Etsy. After the recent downtrend in the Pinterest share price, Pinterest’s valuation ratios are lower than Etsy’s, which may be a sign that Pinterest is currently undervalued.

Click on the video below for my full thoughts and analysis.

* The stock prices used were the midday prices of October 6, 2021. The video was published on October 6, 2021.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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