What happened
Shares of Pinterest (PINS 0.43%) have already fallen 10.1% in 2022, as of the market's close on Thursday. This comes after the stock fell 45% in 2021. Shareholders undoubtedly were hoping that this year would be better than last. But they're likely disappointed with this performance out of the gate. And the analyst community isn't making it easy to know what to do, considering its members' conflicting opinions regarding Pinterest stock.
So what
On Dec. 4, Wolfe Research analyst Deepak Mathivanan started covering Pinterest stock and gave it a $45-per-share price target, according to The Fly. That same day, Guggenheim analyst Michael Morris gave it a $39-per-share price target, according to TipRanks, lowering the stock's rating from buy to neutral. So the rating is neutral even though the price target implies roughly 20% upside from its current price.
Image source: Getty Images.
The next day, Piper Sandler analyst Thomas Champion upgraded Pinterest stock from neutral to buy. But Champion simultaneously lowered the stock's price target from $58 per share to $53 per share, according to The Fly, which seems counterintuitive. If retail investors were looking for clarity from the analyst community, this trio of recommendations probably muddied the waters further.
Taken together, this analyst commentary comes off a little bearish. Moreover, technology stocks like Pinterest have generally struggled in 2022, so Pinterest isn't alone in its 10% decline.
Now what
Investors should keep some human psychology in mind: When stocks are going up we tend to think they'll keep going up, and vice versa. And I believe Morris illustrates this. In the past year, Morris recommended buying Pinterest stock three times, at $84 per share, at $66 per share, and at $44 per share. But now that it trades around $33 per share, the recommendation is to hold, not buy.
Here's my point: Don't let stock price movements influence how you feel about a company. Pinterest needs to grow its user base and increase its monetization of its audience -- these are the fundamental issues. Therefore, any decision to buy or not buy Pinterest stock should be based on how well you believe the company can do both of those things. The shorter your time horizon, the more volatile stocks can be. But years of business results have a tendency to smooth that volatility out.
