• MTTR stock is a big winner recently, drawing the spotlight again.
• However, the housing market needs to keep moving higher, which is questionable.
• Ultimately, speculators won but the long-term picture is murky.

One of the big winners from the post-pandemic period, spatial imaging specialist Matterport (NASDAQ:MTTR) fortuitously developed a business which greatly mitigated the typically high-contact nature of real estate-related transactions. Naturally, 2021 was largely a positive experience for MTTR stock. Fast-forward to 2022 and the situation seems a bit different.

On a year-to-date basis through the March 22 session, MTTR stock finds itself down 60%. Against the trailing year, the comparison is better but not by a whole lot, down 43%. While the ability to digitize three-dimensional spaces for users kept the lights on at Matterport, the unfortunate reality is that people got used to the coronavirus pandemic. Therefore, the underlying business lost some relevance.

However, recent momentum suggests that a recovery may be underway for MTTR stock. Over the past month, shares gained about 35%. Though that’s no doubt encouraging for long-term stakeholders, it does raise a question.

Which is the real Matterport, the one that’s up 35% or down 58%?

Reasons for Optimism for MTTR Stock

While Matterport is not a real estate investment, its spatial imaging solutions are relevant across the entire industry spectrum. Therefore, a positive backdrop for the housing market and the consumer economy will likely yield downwind benefits for MTTR stock.

Under this framework, Matterport shareholders have reasons to be optimistic about their holding. For one thing, certain negative catalysts either appearing to be fading or enjoy the prospect of diminishing. As one example, though the Covid-19 crisis presented a cynical catalyst for MTTR stock, the pandemic also imposed severe business disruptions.

Thus, Covid cases fading may be a net positive for MTTR stock in the long run. And the data right now is encouraging. What’s more, even if cases move higher, Americans are already used to living with Covid, which then supports the economic recovery angle.

Widening the framework, the Russian invasion of Ukraine obviously imposes global stability issues. However, that the two sides have demonstrated some willingness to negotiate suggests that an offramp to this devastating war may possibly materialize. If so, that could drive up valuations for several stocks, not just Matterport.

As well, once major roadblocks are addressed, the Federal Reserve could potentially focus on combating the deleterious impact of soaring consumer inflation. That’s one of the most significant barriers to a holistically healthy real estate market and eliminating the inflation risk could be a game changer for MTTR stock.

But a Lingering Problem May Never Go Away

Although Matterport believers have some data to encourage them, a serious headwind outside management’s sphere of influence should give folks pause. And that is the M2 money stock.

Unsurprisingly, the money stock skyrocketed as Covid-19 capsized our society, leaving elected officials little choice but to enact unprecedented fiscal and monetary policy measures. However, an argument can be made that the government simply “spent” too much money to mitigate the disaster.

When filtered down by quarterly averages, the growth in the M2 money stock on a year-over-year basis jumped to 23.3% in the first quarter of 2021, an all-time high against available records. For instance, the second-highest expansion of M2 money stock occurred in Q2 2009 at 10.1% up.

To be blunt, unless the Fed has the political will to start popping asset bubbles, housing could be increasingly unrealistic for all but the wealthiest among us. And that fact alone will exacerbate hostilities between the haves and have-nots, the privileged and the historically marginalized.

Unfortunately, given how difficult it was for the U.S. to implement measures to mitigate Covid-19, I doubt that the Fed will want to rock the boat with an overly hawkish policy.

It’s a Mes, But It’s Not Matterport’s Fault

When it comes to cautionary takes, they usually fall under two categories. One, an analyst may not like the fundamentals associated with the target company or asset. Two, outside circumstances that could negatively affect said company or asset may be the dominant force.

For MTTR stock, my reason for pensiveness is the latter. I think the spatial imaging technology is relevant and practical. However, such solutions are geared toward real estate businesses in general. And it’s here where I see more vulnerabilities than benefits trickling down.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.