Recently, Macau’s gaming regulator published a five-year development plan for the city, highlighting key aspects regarding sustainable growth, regulatory oversight, and casino license renewal. Notably, all casino stocks including Wynn Resorts (NASDAQ: WYNN) observed a contraction over concerns of regulatory pressure hampering operations and shareholder returns. The plan proposes a requirement of government approval to pay dividends. While the new proposal is available for public consultation until October 29, its merits include the promotion of mass-market gaming that has a significantly higher casino win rate and contributed 40% of Macau’s gross gaming revenues in 2019. Interestingly, Wynn stock reached pre-Covid levels in March 2021, assisted by the popularity of its sports betting application WynnBet. The stock rallied from $100 in June 2020 to $131 in March 2021. Thus, the recent sell-off may be a good buying opportunity to realize gains associated with the public listing of Wynn Resorts’ digital gaming division in the near future.
According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, Wynn Resorts stock will likely gain 4.3% over the next one month (twenty-one trading days) considering the –12.9% drop in the past week (five trading days).
But how would these numbers change if you are interested in holding Wynn Resorts 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 Wynn Resorts 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 one day!
MACHINE LEARNING ENGINE – try it yourself:
IF WYNN stock moved by -5% over five trading days, THEN over the next twenty-one trading days, WYNN stock moves an average of 1.3 percent, with a 51.8% probability of a positive return over this period.
Also, given a -5% movement for the stock over 5 trading days, it has historically witnessed an excess return of -0.4% compared to the S&P500 over the next 21 trading days, with a 45.1% percent probability of a positive excess return.
Some Fun Scenarios, FAQs & Making Sense of Wynn Resorts Stock Movements:
Question 1: Is the average return for Wynn Resorts stock higher after a drop?
Answer: Consider two situations,
Case 1: Wynn Resorts stock drops by -5% or more in a week
Case 2: Wynn Resorts stock rises by 5% or more in a week
Is the average return for Wynn Resorts stock higher over the subsequent month after Case 1 or Case 2?
WYNN stock fares better after Case 1, with an average return of 1.3% 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 1.2% 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 Wynn Resorts 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 Wynn Resorts 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 WYNN 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 Wynn Resorts 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?
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.
WYNN’s 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:
It’s pretty powerful to test the trend for yourself for Wynn Resorts stock by changing the inputs in the charts above.