LendingClub Corporation (NYSE: LC) stock, America’s largest lending marketplace which connects borrowers with investors, has improved 7% in the last week. But will the company’s stock continue to rise over the coming weeks, or is a decline in the stock price now imminent? Based on trends in the company’s stock price over the last 7 years, the Trefis Machine Learning Engine finds average returns for LC stock to be around -2% in the next one-month (twenty-one trading days) period after experiencing a 7% gain in a week (five trading days).
According to the Trefis Machine Learning Engine, LendingClub’s stock price forecast for a month from now is around $28 – 2% below its current market price of roughly $28.61. But how would these numbers change if you are interested in holding LendingClub’s stock for a shorter or a longer time period? You can test the answer and many other combinations on the interactive dashboard. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!
Also, you can understand how LendingClub’s revenues have changed over the years along with trends in revenues for its closest peers in a separate dashboard analysis.
MACHINE LEARNING ENGINE – try it yourself:
IF LC stock moved by -5% over five trading days, THEN over the next twenty-one trading days, LC stock moves an average of 2.4% with a 52.3% probability of a positive return over this period
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LendingClub Stock Movements: Q&A with Trefis AI Engine
Q1: Is the price forecast for LendingClub stock higher after a drop?
Consider two situations,
Case 1: LendingClub stock drops by -5% or more in a week
Case 2: LendingClub stock rises by 5% or more in a week
Is the price forecast for LendingClub stock higher over the subsequent month after Case 1 or Case 2?
LC stock fares better after Case 1, with an expected return of 2.5% 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 expected return of -1.8% for Case 2. This implies a price forecast of $29.32 in Case 1 and a figure of $28.09 in Case 2 using LC market price of $28.61 on 10/7/2021.
In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected 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 rise or drop.
Try the Trefis machine learning engine above to see for yourself how the forecast for LendingClub stock is likely to changes after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold LendingClub 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 LC 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 LendingClub after a larger loss over the last week, month, or quarter.
Q3: 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. More specifically, after the S&P500 rises 5% over five days, the average return over the next seven trading days is negative. You can expect a nominal gain only if you remain invested for at least two weeks (10 trading days). But this average return figure swells to 11.7% over a period of a year (252 trading days).
It’s pretty powerful to test the trend for yourself for LendingClub stock. Would be great to hear how the results compare versus your own intuition.
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