Can Amedisys Stock Rebound After A 5% Fall In A Week?

[Updated: Sep 24, 2021] AMED Stock Update

Last month, we discussed that Amedisys (NASDAQ:AMED) stock price could rebound over a one-month period after falling 3% in a week, based on its historical performance. However, AMED stock has seen a further decline of over 9% since then, and it is down 5% in the last five trading days. Earlier this week, Amedisys announced the acquisition of regulatory assets allowing the company to expand its operations in Charlotte and Raleigh, N.C. markets.

The stock has significantly underperformed the broader markets so far this year with a decline of 44% compared to a rise of 20% for the broader S&P500 index. This can be attributed to the impact of  the pandemic on the overall hospice business. The company after Q2 lowered its full-year outlook, and now with a rise in total number of new Covid-19 cases in the U.S., the business is likely to see slow growth. This has resulted in some pessimism around AMED stock over the recent past.

As we discussed in our previous update, according to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for AMED stock average around 3.6% in the next one-month (twenty-one trading days) period after experiencing a 5% drop over the previous week (five trading days) with a reasonable 61% probability of a positive return over this period. Our dashboard on Amedisys stock price forecast offers more details.

So, if this follows historical performance, it is likely that AMED stock will see a rebound going forward. Also, Amedisys Stock Return summarizes AMED stock performance and chances of its rise or decline, among other metrics that matter.

[Updated: Aug 24, 2021] AMED Stock Decline

The stock price of Amedisys (NASDAQ:AMED), a home-health and hospice company, reached its 52-week low of $175 in yesterday’s trading session. AMED stock has seen a gradual decline from levels of over $310 in Jan and Feb this year to levels of around $250 earlier this month, before a recent sell-off in the stock pushed it further down to levels of $178 currently. AMED stock has fallen 3.3% over the last five days. The fall this month can largely be attributed to the company’s revised outlook for the full-year, with revenue and earnings both expected to be lower than the street estimates, primarily due to the impact of the pandemic on its hospice business. The EPS guidance of $6.43 at mid-point of its range is well below the consensus estimate of $6.96, and this didn’t bode well with the investors. But will AMED stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent?

According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for AMED stock average around 2.5% in the next one-month (twenty-one trading days) period after experiencing a 3% drop over the previous week (five trading days). But how would the returns fare if you are interested in holding Amedisys stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Amedisys stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF AMED stock moved by -5% over five trading days, THEN over the next twenty-one trading days AMED stock moves an average of 3.5%, with a 61% probability of a positive return over this period.

Some Fun Scenarios, FAQs & Making Sense of Amedisys Stock Movements:

Question 1: Is the average return for Amedisys stock higher after a drop?

Answer: Consider two situations,

Case 1: Amedisys stock drops by -5% or more in a week

Case 2: Amedisys stock rises by 5% or more in a week

Is the average return for Amedisys stock higher over the subsequent month after Case 1 or Case 2?

AMED stock fares better after Case 1, with an average return of 3.5% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Amedisys stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Amedisys stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For AMED stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Amedisys after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although AMED stock appears to be an exception to this general observation.

It’s pretty powerful to test the trend for yourself for Amedisys stock by changing the inputs in the charts above.