Momentum From Recent Rally To Drive Fastenal Stock Higher?

by Trefis Team
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Fastenal Company stock (NASDAQ: FAST) has gained almost 6% in the past week and currently trades at $55 per share. Additionally, Fastenal, a supply chain solutions provider, has seen its stock gain more than 10% over the last six months, rising from $50. The company’s recent Q3 2021 earnings reported this week saw revenue rise from $1.41 billion in Q3 ’20 to $1.55 billion in Q3 ’21. Further, expenses rose at a slower rate, and with a roughly unchanged effective tax rate, EPS rose from $0.39 in Q3 ’20 to $0.42 in Q3 ’21.

Now, after the recent rally, will FAST stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for FAST stock average 2.6% (implying an increase in stock price from $55.62 to $57.00) in the next one-month (twenty-one trading days) period after experiencing a 5.5% rise over the previous week (five trading days).

But how would these numbers change if you are interested in holding Fastenal 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 Fastenal stock price forecast after a rise or fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day. For additional details about Fastenal historical returns, and return comparison to peers see Fastenal (FAST) Stock Return.

MACHINE LEARNING ENGINE – try it yourself:

If Fastenal stock moved by -5% over five trading days, THEN over the next twenty-one trading days Fastenal stock moves an average of 3.7%, with a decent 64.6% probability of a positive return over this period.

Also, given a -5% movement for the stock over five trading days, it has historically witnessed an excess return of 2.2% compared to the S&P500 over the next 21 trading days, with an average 58.3% probability of a positive excess return.

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

Question 1: Is the price forecast for Fastenal stock higher after a drop?

Answer: Consider two situations,

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

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

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

Fastenal stock fares better after Case 1, with an expected return of 3.1% 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 expected return of 2.8% for Case 2. This implies a price forecast of $57.34 in Case 1 and a figure of $57.16 in Case 2 using Fastenal market price of $55.62 on 10/14/2021.

In comparison, the S&P 500 has an expected 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 expected return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Fastenal 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 Fastenal 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 Fastenal 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 Fastenal after a larger loss over the last week, month, or quarter.

Question 3: What about the stock price forecast after a rise if you wait for a while?

Answer:  The expected return after a rise is understandably lower than after a drop 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.

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

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since 2016.

Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates
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