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BERLIN, GERMANY – JUNE 27: Peloton stores in Berlin on June 27, 2020 in Berlin,… [+] Germany. (Photo courtesy of Getty Images/Jeremy Moeller)
courtesy of Getty Images
Peloton stock (NASDAQ: PTON) has dropped roughly 10% in the last week (five trading days), compared to the S&P 500, which has increased modestly. The stock has recently dropped as a result of downgrades by brokerage analysts, including a long-time Peloton supporter, who cited increased competition in the connected fitness industry and inflated expectations for the firm as reasons for the drop. The general shift away from at-home stocks and toward cyclical and value stocks has harmed Peloton stock, which is down approximately 25% year to date. So, will Peloton stock continue to fall in the coming weeks and months, or is it more likely to rise? According to the Trefis Machine Learning Engine, which detects trends in a company’s historical stock price data, Peloton stock returns average 8% in the next month (21 trading days) after a 10% loss in the previous five trading days. The stock is also anticipated to outperform the S&P 500 in the coming month, with an expected return of 8.5 percent greater than the S&P 500.
But how do these figures vary if you choose to hold Peloton stock for a shorter or longer period of time? You can use Trefis Machine Learning to test the answer and many more combinations to see if PTON stock would climb following a dip or vice versa. You can evaluate the likelihood of recovery across time intervals of a quarter, month, or even a single day!
TRY THE MACHINE LEARNING ENGINE FOR YOURSELF:
IF PTON stock moves -5 percent in 5 trading days, it will move an average of 8.7% in the next 21 trading days, with a 62.2 percent chance of a positive return during that time.
Furthermore, given a -5 percent move in the stock over 5 trading days, it has historically seen an excess return of 8.5 percent over the next 21 trading days when compared to the S&P 500, with a 58.2 percent probability of a positive excess return.
ADDITIONAL INFORMATION FOR YOU
Making Sense of PTON Stock Movements: Some Fun Scenarios, FAQs, and Making Sense of PTON Stock Movements:
Question 1: Does PTON stock have a better average return following a drop?
Answer:
Consider the following two scenarios:
Case 1: The stock of Peloton Interactive falls by 5% or more in a week.
Case 2: The stock of Peloton Interactive grows by at least 5% in a week.
Is the average return on Peloton Interactive stock higher after Case 1 or Case 2 in the following month?
PTON stock performs better following Case 2, with an average return of 8.7% over the next month (21 trading days) vs an average return of 11.2 percent for Case 1 (where the stock had just experienced a 5% loss over the previous week).
In example, the S&P 500 has an average return of 3.1 percent in Case 1 and barely 0.5 percent in Case 2 over the next 21 trading days, according to our dashboard, which shows the average return for the S&P 500 after a decline or rise.
Use the Trefis machine learning engine to analyze how Peloton Interactive stock is expected to react following any specific gain or loss over time.
Question 2: Does it pay to be patient?
Answer: If you buy and hold Peloton Interactive stock, you may anticipate near-term swings to fade away with time, and a long-term favorable trend to favor you – at least if the company is otherwise sound.
Overall, facts and Trefis’ machine learning engine estimates show that patience pays off in most stocks!
The following table shows the returns for PTON stock over the next N days after a -5 percent change over the previous 5 trading days, as well as the returns for the S&P500:

Trefis Average Return
Question 3: If you wait a bit following a climb, what is the average return?
Answer: As mentioned in the preceding question, the average return after a rise is lower than after a decrease. Surprisingly, if a company has increased in the recent few days, you should avoid short-term bets for most stocks – although PTON stock looks to be an exception to this general rule.
The table below shows PTON’s returns over the next N days after a 5% move over the previous 5 trading days, as well as the S&P500’s returns:

Trefis Average Return
Here you may find all of Trefis’ Featured Analyses and Trefis Data./nRead More

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