Analyzing the Social Commerce Landscape: Meta vs. Pinterest

Meta Platforms (META) and Pinterest (PINS) are influential players in the social commerce sector, a niche within e-commerce. Social commerce utilizes social media to market and sell products or services, enabling small to medium-sized businesses to engage customers effectively. This approach enhances brand reach, engagement, and conversion rates while allowing customers to discover and purchase items without leaving the platform.

According to bigcommerce.com, drawing from Statista data, social commerce sales are projected to increase significantly from $570 billion in 2023 to over $1 trillion by 2028. eMarketer forecasts retail social commerce sales in the United States to reach approximately $80 billion by 2025. Such data point to substantial growth possibilities for social media platforms as they continue to highlight unique content generated by brands, influencers, and consumers. Features like livestreaming, augmented reality (AR), virtual reality (VR), and gaming are enhancing the shopping experience on these platforms.

Meta Platforms: A Leader in Social Commerce

Meta Platforms leverages its platforms, Facebook and Instagram, to deliver a comprehensive social commerce experience. Shopify, citing Statista data, states that 89% of social media marketers prefer Facebook for driving sales, and one-third of social commerce buyers favor purchasing through Facebook. Instagram boasts a user base representing about 26% of the global population aged 13 and above.

Users on Instagram can purchase products showcased in images and videos throughout the app. Features like shopping tags and the shop tab facilitate product discovery and purchasing directly on the platform. The shop tab also allows businesses to advertise their products seamlessly. Meta supports collaborations between brands and creators on Instagram and has extended its creator marketplace to international markets including Canada, Australia, New Zealand, the U.K., Japan, India, and Brazil.

Beyond Facebook and Instagram, Meta is enhancing business interactions on WhatsApp. The company has introduced AI tools that aid businesses in assisting customers and discovering new products. This integrated AI simplifies ad creation for businesses on Facebook and Instagram.

Meta Verified, offered on Instagram, Facebook, and WhatsApp, presents several subscription plans that help businesses gain credibility. Each plan includes a verified badge, account support, and protection against impersonation, which builds consumer trust and attracts new businesses to the platforms.

Pinterest’s Unique Appeal

Pinterest provides users, known as Pinners, with visual recommendations called Pins based on personal interests. Users can save these recommendations into their collections, referred to as Boards.

As of 2024, Pinterest’s global user base reached 553 million monthly active users. Its features, including native targeting and interactive insights, empower businesses to effectively reach and convert customers.

Notably, 96% of Pinterest searches are unbranded, allowing shoppers to discover new products. Furthermore, 80% of weekly Pinners report feeling inspired by their shopping experience on the platform. Pinterest is particularly popular among Gen Z, who make up 42% of its user base.

Stock Performance: META vs. PINS

Both Meta and Pinterest have seen their stock prices decline due to a sector-wide sell-off tied to the ongoing trade war following former President Donald Trump’s tariff announcements. Year-to-date, META shares have decreased by 11.4% while Pinterest shares have fallen 12.4%.

Stock Performance of META and PINS

Image Source: Zacks Investment Research

META and PINS Earnings Estimates

The Zacks Consensus Estimate for META’s 2025 earnings stands at $25.62 per share, indicating a modest increase of one cent over the past month. This reflects a 7.38% rise compared to the reported earnings for fiscal 2024.

Meta Platforms, Inc. Stock Price and Consensus

Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote

In contrast, the consensus estimate for PINS’ 2025 earnings remains unchanged at $1.82 per share, suggesting significant growth of 41.09% over 2024.

Pinterest, Inc. Stock Price and Consensus

Pinterest, Inc. price-consensus-chart | Pinterest, Inc. Quote

META has consistently exceeded the Zacks Consensus Estimate in all four previous quarters, whereas PINS has missed once. Meta Platforms boasts an average earnings surprise of 13.77%, slightly outperforming Pinterest’s 13.24%, indicating a stronger operational performance.

Valuation Comparison: PINS vs. META

From a valuation perspective, both Meta and Pinterest appear overvalued based on their Value Scores, with META rated a C and PINS rated a D. Currently, Pinterest shares trade at a forward 12-month Price/Sales ratio of 3.93X, lower than Meta Platforms’ 6.69X.

PINS and META Valuation

Image Source: Zacks Investment Research

Conclusion

Meta Platforms leads the social commerce sector through its robust offerings on Instagram and Facebook. Its strategies to enhance user and business features contribute to its market edge. Conversely, while Pinterest enjoys popularity among younger users, it still has significant strides to make to enhance its competitiveness against Meta.

Currently, Meta Platforms holds a Zacks Rank #2 (Buy), positioning it as a more favorable investment option compared to Pinterest, which holds a Zacks Rank #3 (Hold). Interested investors can find a complete list of Zacks #1 Rank (Strong Buy) stocks here.

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This article was first published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.