After Rising 10% Last Week, Time To Exit NortonLifeLock Stock?

NortonLifeLock stock (NASDAQ: NLOK) has seen an impressive rise of 10% over the past week and currently trades at around $26 per share. The stock rally was driven by the company’s announcement regarding the acquisition of its British rival Avast, in a move to consolidate the market. The agreement will see Avast stockholders receive cash and shares, valuing the deal at over $8 billion. Further, in late July, the company announced strong Q1 2022 earnings, with revenue rising from $614 million to $686 million. Shrewd expense control saw operating income more than double from $120 million to $287 million over this period. This led to EPS rising from $0.25 to $0.31.

After the recent rally, will NLOK stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for NLOK stock average close to -0.7% in the next one-month (21 trading days) period after experiencing a 9.6% rise over the previous one week (five trading days) period. But how would these numbers change if you are interested in holding NLOK 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 NortonLifeLock stock chances of a rise after a fall and vice versa. 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 NLOK stock moved by -5% over five trading days, THEN over the next 21 trading days, NLOK stock moves an average of 3.6 percent, with a decent 65.4% probability of a positive return.

Some Fun Scenarios, FAQs & Making Sense of NortonLifeLock Stock Movements:

Question 1: Is the average return for NLOK stock higher after a drop?

Answer:

Consider two situations,

Case 1: NLOK stock drops by -5% or more in a week

Case 2: NLOK stock rises by 5% or more in a week

Is the average return for NLOK stock higher over the subsequent month after Case 1 or Case 2?

NLOK stock fares better after Case 1, with an average return of 3.6% 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 0.4% 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 NLOK 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 NLOK 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 NLOK 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:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

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.

NLOK’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 NLOK stock by changing the inputs in the charts above.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market since 2016.

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