Blog 3

Stocks

Pinterest defines themselves as an American image sharing and social media service designed to enable saving and discovery of information on the internet using images and, on a smaller scale, animated GIFs and videos, in the form of pinboards. The number one factor for this industry is engagement: if more people use your social media, there are more advertisers who are willing to pay money. Currently, the stock price has declined almost 44% from $90 to $50. The CEO has two reasons for this downfall:

  • People are starting to spend less and less time on electronics now that the pandemic is coming to an end
  • Desktop users, who are Pinterest’s main target consumers, have left the market

Right now, Pinterest has a very strong “business-operating momentum”, and the fact that they are trading so low may actually be a good thing. When you hit rock bottom, the only way you can go is up!

As for financials, here are the highlights of Pinterest’s current structure:

  • Market Cap: $32.89B
  • Revenue Q/Q: 125%
  • Price/Sales: 14.69
  • Gross Margin: 73.45%

Next, Marqeta works with card networks and issuing banks to issue cards, authorize transactions, and communicate with settlement entities. Just like Pinterest, their stock price has lowered quite a bit, down 40% from $32 to $20. Marqeta is a relatively new company, but it is poised to grow over the long run. Marqeta mainly powers fintech-related cards, with their main partners being Square, Uber, and Doordash. This is good news because all their clients are experiencing a lot of growth right now, and whatever growth occurs will inevitably help Marqeta. However, the most promising part is that the financial technology industry is relatively new and has a lot of potential to grow. In other words, Marqeta is at the forefront of a trillion-dollar industry. Below are the major financials for Marqeta:

  • Market Cap: $11.78B
  • Revenue Q/Q: 76%

Financial Term

The financial term for this blog is EBITDA, and it stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This is typically a preliminary measure that investors use to choose companies and is often used as an alternative to net income (covered in the previous blog). Though EBITDA is a great tool to use, it does have its drawbacks. For starters, it is not the best measure because it does not account for the debt a company has. However, EBITDA is a great way to “estimate cash flow available to pay long-term debt” and “provide a snapshot of short-term operational efficiency.”