Buy the Dip on Pinterest Stock, Says Analyst

The stock has lost ovver 55% in the last 12 months

Deputy Editor
Jan 5, 2022 at 8:51 AM
facebook twitter linkedin


The shares of Pinterest Inc (NYSE:PINS) are up 1.6% at $33.66 this morning, following an upgrade to "overweight" from "neutral" at Piper Sandler, while also  lifting its price target to $53 from $58. The analyst noted that PINS' nearly six-month selloff presents a good buying opportunity for investors, especially as user trends improve and mobile usage stabilizes. 

The affforementioned selloff, which was initially sparked by a late-August bear gap, has left PINS at a 51.3% year-over-year deficit, and just yesterday the stock bottomed out at a fresh annual low of $32.42. The security will still need to contend with several looming trendlines if it wants to stage a rebound, including its 30-day moving average, which has been guiding shares lower since September -- save for a brief mid-October breakout. 

A short-term bounce could already be on the way. This is considering the equity's 14-day relative strength index (RSI) of 32, which sits just on the cusp of "oversold' territory. 

Sentiment surrounding PINS is still lukewarm, with 12 of the 16 in coverage calling the stock a "hold" coming into today. Meanwhile, the 12-month consensus price target of $54.51 is a 64.5% premium to current levels. 

Now might be the perfect time to speculate on Pinterest stock's next move with options. The security sports a Schaeffer's Volatility Index (SVI) of 57%, which stands higher than just 26% of readings from the past year. This implies options traders have been pricing in relatively low volatility expectations at the moment. What's more, the stock's Schaeffer's Volatility Scorecard (SVS) sits at 87 out of a possible 100, meaning the stock tends to outperform these expectations at the moment. 

 




 
Special Offers from Schaeffer's Trading Partners