Verisign stock (NASDAQ: VRSN) has lost almost 4% over the past week and currently trades at just over $216 per share. Additionally, Verisign stock is up just a little over 1% since the start of the year. However, the company’s recent Q2 ’21 earnings reported around the end of July saw revenue jump from $314 million in Q2 ’20 to $329 million in Q2 ’21. With operating expenses mostly in check, operating income rose from $207 million to $213 million over this period. However, a $10 million rise in non-operating expenses saw EPS drop from $1.32 to $1.31 over this period.
However, after a 4% fall last week, will Verisign 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 Verisign stock average 4.3% (implying an increase in stock price from $216 to $226) in the next one-month (twenty-one trading days) period after experiencing a 3.7% drop over the previous week (five trading days).
But how would these numbers change if you are interested in holding Verisign 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 Verisign 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 Verisign historical returns, and return comparison to peers see Verisign (VRSN) Stock Return.
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MACHINE LEARNING ENGINE – try it yourself:
If Verisign stock moved by -5% over five trading days, THEN over the next twenty-one trading days Verisign stock moves an average of 4.6%, with a decent 69% 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 2.3% compared to the S&P500 over the next 21 trading days, with a decent 61.2% percent probability of a positive excess return.
Some Fun Scenarios, FAQs & Making Sense of Verisign Stock Movements:
Question 1: Is the price forecast for Verisign stock higher after a drop?
Answer: Consider two situations,
Case 1: Verisign stock drops by 5% or more in a week
Case 2: Verisign stock rises by 5% or more in a week
Is the average return for Verisign stock higher over the subsequent month after Case 1 or Case 2?
Verisign stock fares better after Case 1, with an expected return of 4.7% 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 3.4% for Case 2. This implies a price forecast of $227 in Case 1 and a figure of $224 in Case 2 using VRSN market price of $216.48 on 9/24/2021.
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 Verisign 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 Verisign 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 Verisign 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 Verisign 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 Verisign stock by changing the inputs in the charts above.