What’s Happening With FibroGen Stock?
[Updated: Oct 4, 2021] FGEN Stock Update
Last month, we discussed that FibroGen (NASDAQ: FGEN) stock price could rebound over a one-month period after falling 6% in a week, based on the Trefis Machine Learning Engine. However, FGEN stock has seen a decline of over 12% since then, and it is down 5% in the last five trading days. The recent decline can be attributed to an analyst downgrade on the stock with concerns over Roxadustat delay. Roxadustat is being evaluated for the treatment of anemia with peak sales estimated to be around $2 billion. Earlier in August, the company released minimal data from phase two trials of Roxadustat, and that did not sit well with the investors.
As we discussed in our previous update, according to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for FGEN stock average around 2.1% in the next one-month (twenty-one trading days) period after experiencing a 5% drop over the previous week (five trading days) with a 56% probability of a positive return over this period. Our dashboard on FibroGen stock price forecast offers more details. Note that consensus price estimate for FGEN is around $21, implying over 2x premium from the current levels of around $10.
So, if this follows historical performance, it is likely that FGEN stock will see a rebound going forward. Also, FibroGen Stock Return summarizes FGEN stock performance and chances of its rise or decline, among other metrics that matter.
[Updated: Aug 31, 2021] FGEN Stock Decline
The stock price of FibroGen (NASDAQ: FGEN), a biopharmaceutical company focused on therapeutics in immunology and oncology, reached its 52-week high of $56 in February this year before a large sell-off in FGEN stock, especially after the company disclosed that safety analyses from a late-stage study of Roxadustat – used to treat anemia – sending the stock to much lower levels of under $15. Now, FGEN stock has further lost 6% of its value over the last five trading sessions. The recent decline came after the company announced positive results from phase two clinical trials for Roxadustat. While the news should have been positive for the stock, it resulted in the stock actually declining. This can be attributed to the company disclosing minimal information about the clinical trials. With very minimal information to go with, this didn’t sit well with the investors, sending FGEN stock to its 52-week low levels of around $11 currently. But will FGEN stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent?
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According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using seven years of historical data, returns for FGEN stock average 2% in the next one-month (twenty-one trading days) period after experiencing a 6% drop over the previous week (five trading days). It is likely that the company will provide more data going forward to support its claim and given the fact that FGEN stock has corrected meaningfully, any positive news is likely to support the stock appreciation in the near term. But how would the returns fare if you are interested in holding FGEN 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 FibroGen stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!
MACHINE LEARNING ENGINE – try it yourself:
IF FGEN stock moved by -5% over five trading days, THEN over the next twenty-one trading days FGEN stock moves an average of 2.3%, with a reasonable 57% probability of a positive return over this period.
Some Fun Scenarios, FAQs & Making Sense of FibroGen, Inc Stock Movements:
Question 1: Is the average return for FibroGen, Inc stock higher after a drop?
Answer: Consider two situations,
Case 1: FibroGen, Inc stock drops by -5% or more in a week
Case 2: FibroGen, Inc stock rises by 5% or more in a week
Is the average return for FibroGen, Inc stock higher over the subsequent month after Case 1 or Case 2?
FGEN stock fares better after Case 1, with an average 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 average return of 0.9% 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 FibroGen, Inc 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 FibroGen, Inc 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 FGEN 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 FibroGen, Inc 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?
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.
It’s pretty powerful to test the trend for yourself for FibroGen, Inc stock by changing the inputs in the charts above.
While FGEN stock will likely see a rebound in the near term, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Merck vs. Regeneron.
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