Shares of Overstock.com, Inc. (OSTK) popped 22.8% after the company’s fourth-quarter earnings beat estimates. The company provides an American e-commerce portal that offers home products and furnishings at affordable prices.
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Earnings grew 161.5% year-over-year to $0.68 per share and outpaced consensus estimates of $0.39 per share. Meanwhile, total net revenue declined 8.5% year-over-year to $612.6 million and lagged analysts’ estimates of $644 million.
The company’s active customers decreased 12% year-over-year. Although the company delivered three million orders during the quarter, down 25%, the average order value increased 23% to $206.
Overstock CEO Jonathan Johnson said, “We are proving we can adjust to, execute through, and take advantage of both positive and negative jolts in the market. It’s encouraging that nearly one third of the overall home furniture and furnishings market continues to be transacted online. I believe increasing our brand association with home positions us favorably for 2022 and beyond.”
Stock Rating
Following the release, Wedbush analyst Michael Pachter maintained a Buy rating on the stock but lowered the price target to $95 from $115. The new price target implies 112.2% upside potential to current levels.
Pachter said, “We continue to view Overstock as a quality name to own amid the ongoing global supply chain disruption, as it is well-positioned with commodity/unbranded products and plenty of selection. Should GDP growth come in at 3% annually for the next several years, we believe that the TAM for home furnishings will grow by around the rate of GDP growth, or by around $9 billion annually.”
Based on 4 Buys and 1 Hold, the stock commands a Strong Buy consensus rating. The average Overstock.com price target of $90 implies 101% upside potential to current levels.
Positive Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Overstock, as 1.8% of investors on TipRanks increased their exposure to OSTK stock over the past 30 days.
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