Pilbara Minerals Ltd (ASX: PLS) stock is already down more than 14% this year to date, fetching $1.87 apiece at the time of writing.

Now, short interest in the lithium miner's shares is more than 11% as of Monday, making it one of the most shorted stocks on the ASX 200.

Shares also recently hit a 52-week low of $1.85, well off its former highs seen during the lithium boom of 2021 to 2022. Why are short-sellers piling in? Let's see.

Why is Pilbara Minerals stock under pressure?

Being a price taker on lithium, Pilbara Minerals stock is sensitive to fluctuations in the price of the metal, which remains weak.

Trading Economics reports that the market is still "oversupplied", limiting demand for new supply contracts.

Even though electric vehicle (EV) sales were 17% higher year over year in China in January, "battery inventories for manufacturers will remain elevated".

Pilbara's earnings have taken a hit as a result of the price slump.

The company reported a 44% drop in revenue for the first half of FY25, down to $426 million.

Meanwhile, pre-tax earnings sank by 83%, thanks to the nearly 60% fall in the average realised lithium prices.

To cut costs, management placed the company's Ngungaju plant into temporary care and maintenance.

But the bigger picture is the large downtrend in Pilbara Minerals stock, that's been in situ for around two years now.

This has seen Pilbara on the list of 'most shorted ASX shares' week after week, indicating plenty of investors are betting on a further decline in the company's share price.

What's next for Pilbara Minerals stock?

Despite the short interest, on balance, brokers are bullish. According to CommSec, twelve brokers rate it a buy, eight a hold, and just one recommending to sell Pilbara Minerals stock.

Bell Potter is one that rates the stock a buy, setting a $3 price target.

Meanwhile, Goldman Sachs is neutral on the company, seeing "medium-term FCF remainingsubdued" in a February note. It adds:

We note capex and execution risk remains across both projects, where uncertain project timing/a preference for remaining net cash and preserving balance sheet strength may defer value realisation.

The consensus price target from brokers covering the stock is $2.67 per share, according to Trading View.

Foolish takeaway

Pilbara Minerals stock is under pressure from weak lithium prices, which is causing issues downstream in revenues and profit growth.

Some brokers remain bullish, but short sellers continue to pile in this week. There is no saying which side of the coin will be right in the long run.

Pilbara is down more than 54% in the past year.