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Editor's Note: Shares of Pinterest (PINS) have rocketed over 70% since our Communications analyst Andrew Freedman unveiled his bullishness on the company during a deep-dive Black Book presentation for institutional investors on Monday, April 15th. 

FLASHBACK | 40-50% Upside For Pinterest (PINS)  - z111

“I like the story,” Freedman explained in the clip below from The Macro Show a few days before the IPO. “After reading the S1 and doing the work…everything has come back really positive.”

And here's an excerpt from a note written just before the IPO.

A UNICORN WORTH BUYING; 40-50% UPSIDE

There is a lot we like about the company and its fundamentals. We like that PINS is in the very early stages of monetizing their 265 million MAUs (184M Intl / 82M U.S.), especially in international markets where ARPU averaged a paltry $0.06 per quarter in 2018.

We like that PINS value proposition to advertisers is based on conversion over reach, with more than 50% of users coming to the platform with the intent to find or shop for products. Our preliminary checks with agencies and CPG companies have come back mostly positive and in support of the ROI narrative and increased ad-spend on both a net new and same-store basis.

From a user perspective, such high commercial intent means that ads are a natural part of the user experience, unlike social media platforms where ads are incidental. Meanwhile, management has avoided the 'growth at all cost' mentality in favor of a more disciplined and measured approach, a style better suited for a public company in our opinion.  This difference in philosophy has manifested itself in part through improved profitability and scale, with the company on track to achieve full-year adjusted EBITDA profitability in 2019, based on our model. 

Overall, we like the PINS story at $15 - $17/share and see 40-50% upside from the mid-point based on its growth rate relative to peers.