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Overstock.com (OSTK) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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Overstock.com (OSTK) closed at $67.40 in the latest trading session, marking a -0.75% move from the prior day. This change lagged the S&P 500's 0.36% gain on the day. At the same time, the Dow lost 0.12%, and the tech-heavy Nasdaq gained 0.69%.

Coming into today, shares of the online discount retailer had gained 19.64% in the past month. In that same time, the Retail-Wholesale sector gained 2.36%, while the S&P 500 gained 4.27%.

Wall Street will be looking for positivity from OSTK as it approaches its next earnings report date. In that report, analysts expect OSTK to post earnings of $0.27 per share. This would mark year-over-year growth of 136.99%. Our most recent consensus estimate is calling for quarterly revenue of $709.60 million, up 91.33% from the year-ago period.

It is also important to note the recent changes to analyst estimates for OSTK. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. OSTK is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note OSTK's current valuation metrics, including its Forward P/E ratio of 59.05. For comparison, its industry has an average Forward P/E of 51.2, which means OSTK is trading at a premium to the group.

Also, we should mention that OSTK has a PEG ratio of 2.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.74 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 216, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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