Steve Madden’s stock (NASDAQ: SHOO), a company designing and retailing fashion footwear, handbags, and accessories, has seen a 4% rise in the last week (five trading days) to levels of near $42 currently. But will the company’s stock see higher levels over the coming weeks, or is a decline in the stock imminent? According to Trefis Machine Learning Engine, which identifies trends in a company’s stock price, SHOO stock could return 1.8% over the next one-month (twenty-one trading days) after experiencing a 4.0% growth during the last week. This implies a slight increase in SHOO stock price from $40.75 to $41.50 over the next month. But how would these numbers change if you are interested in holding SHOO stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis machine learning engine SHOO stock price forecast. You can see the chance of recovery over different time intervals of a quarter, month, or even just one day!
SHOO saw a second quarterly report that nominally beat expectations on both its top and bottom lines. While its adjusted EPS of $0.48 came in only slightly ahead of pre-pandemic second quarter 2019, its revenues of $398 million were still down $52 million from the comparable quarter two years ago. However, the company’s revenue from Steve Madden’s retail segment, driven by its e-commerce business, increased 63% compared to the pre-Covid quarter. Looking ahead, the retailer offered guidance for the year of 43% to 47% annual revenue growth and adjusted EPS in the range of $2.00 and $2.10.
And if you are considering SHOO’s stock as an investment option over a longer time frame, you can also explore Steve Madden Revenue Comparison against its peers and history.
MACHINE LEARNING ENGINE – try it yourself:
IF SHOO stock moved by -5% over five trading days, THEN over the next twenty-one trading days, SHOO stock moves an average of 2.5%, with a 56% probability of a positive return over this period.
Some Fun Scenarios, FAQs & Making Sense of SHOO Stock Movements:
Question 1: Is the average return for SHOO stock higher after a drop?
Answer: Consider two situations,
Case 1: SHOO stock drops by -5% or more in a week
Case 2: SHOO stock rises by 5% or more in a week
Is the average return for SHOO stock higher over the subsequent month after Case 1 or Case 2?
SHOO stock fares better after Case 1, with an expected return of 2.1% 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 2.0% for Case 2. This implies a price forecast of $42.66 in Case 1 and a figure of $42.59 in Case 2 using SHOO market price of $41.77 on 10/8/2021.
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 SHOO 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 Steve Madden’s 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 the Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
For SHOO 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 SHOO stock 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. 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 Steve Madden stock. It would be great to hear how the results compare versus your own intuition.
While SHOO’s stock is likely to move slightly higher in the near term, there are several stocks in S&P500 that look like a Better Bet Than SHOO stock. Also, Steve Madden’s Peer Comparisons summarizes how the company fares against peers on metrics that matter.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.