PINS vs SNAP: Which Social Media Stock is a Smart Investment Now?

Pinterest, Inc. PINS and Snap Inc. SNAP are major players in the social ecommerce space. Social ecommerce has gained significant prominence among users over the last few years. The convenience it offers by eliminating the extra steps, allowing users to directly find what they need within the app, and personalized recommendations are making it a popular choice. For retailers and sellers, social ecommerce has significantly improved the precision of audience targeting. This is driving conversion rates and boosting return on investment.Per a report of Grand View Research, the global social ecommerce market is expected to reach $6.24 trillion by 2030, witnessing a CAGR of 31.6% from 2023 to 2030. The social media giants like Pinterest and SNAP are intensifying their efforts to gain firmer footing in this expanding market.The Case for PINSPinterest is benefiting from solid user growth in multiple verticals. Healthy momentum in the retail sector, coupled with growing traction in some emerging markets such as financial services, technology and entertainment, is driving growth. Pinterest’s effort to bridge the gap between upper-funnel storytelling and inspiration to lower-funnel conversion is improving campaign performance.The company is extensively incorporating advanced AI capabilities to drive personalization across the platform. It has built a powerful AI recommendation engine. Utilizing a large information pool encompassing searches, saves, and clicks of Pinterest’s global client base, the AI model effectively generates 400 million predictions every second. Such speed and scale allow the company to accurately anticipate future emerging trends. Such capabilities allow Pinterest to develop powerful tools for creators to drive user engagement and also for advertisers to boost conversion rates, ensuring a sustained return on investment. In the first quarter of 2025, Pinterest witnessed 10% year-over-year growth in global monthly active users (MAUs) to 570 million, which is an all-time record.Pinterest's debt-to-capital ratio stands at 0.0%. Its current ratio stands at 8.41, while its cash ratio is 6.47. As of March 31, 2025, Pinterest had $1.25 billion in cash and cash equivalents. PINS’ strong liquidity position will enable it to make further investments in product development and acquisitions in the future.Pinterest faces significant competition from larger, more established companies such as Meta Platforms, Inc. META, SNAP and X.com. It heavily relies on advertising as its primary source of revenue. Any adverse changes in the advertising industry, shift in advertiser preferences, or economic downturns can affect the company’s financial performance.The Case for SNAPOwing to the immersive experience offered by the platform, Snapchat has become the most preferred social networking medium among Millennials and Gen Z. The company stated that Snapchat reaches 75% of 13-34-year-olds in the United States, making it a larger platform than Facebook, Instagram and Twitter among this demography. Snap reached more than 900 million monthly active users in the first quarter. To solidify its hold on its existing customer base and accelerate customer engagement, the company is actively introducing several cutting-edge tools and features.To support creators, the company recently launched the “Create a Video” template, which makes it easier and faster to create lens-powered videos from saved memories. Snap recently rolled out several new insights across stories and spotlights. This set of insights will allow creators to optimize their content and attract relevant brand partnerships. The company launched Lens+, which provides access to hundreds of Lenses and AR experiences that will let users play, create and share Snaps with friends in new ways. Such initiatives are expected to drive user engagement across the platform and drive advertising revenue.At the end of the first quarter of 2025, SNAP reported a current ratio of 4.3, way above the industry's average of 2.38. A current ratio above 1 suggests that a company is well-positioned to meet its short-term obligations.However, Snapchat operates in a highly competitive social ecommerce space and faces fierce competition from Meta, and Pinterest. Facebook’s strategy of imitating Snapchat’s features to boost user engagement has paid off. Meta’s Instagram also has strong e-commerce integration and has become a preferred choice for advertisers. Lack of revenue diversification and high reliance on ad revenues are major concerns for Snapchat.How Do Zacks Estimates Compare for PINS & SNAP?The Zacks Consensus Estimate for Pinterest’s 2025 sales and EPS implies year-over-year growth of 13.8% and 42.64%, respectively. The EPS estimates have improved over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for SNAP’s 2025 sales implies year-over-year growth of 8.59%, while EPS implies a decline of 13.79% year over year. The EPS estimates have declined over the past 60 days.Image Source: Zacks Investment ResearchPrice Performance & Valuation of PINS & SNAPOver the past year, Pinterest has declined 20.7% against the industry’s growth of 33.2%. SNAP has declined 47.8% over the same period.Image Source: Zacks Investment ResearchSNAP looks more attractive than PINS from a valuation standpoint. Going by the price/sales ratio, Snap’s shares currently trade at 2.26 forward sales, lower than 5.4 for Pinterest.Image Source: Zacks Investment ResearchPINS or SNAP: Which is a Better Pick?Pinterest and Snapchat carry a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Both companies are taking several strategic initiatives to drive user engagement across the platform. Upward estimate revisions showcase growing investors' confidence in Pinterest stocks. With a strong AI focus, improvement in monetization opportunities across the platform, and a robust liquidity position, Pinterest appears to be a better investment option.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Snap Inc. (SNAP): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks