Overstock Earnings Impress BofA Analyst: Here's Why

Overstock.com Inc OSTK reported solid first-quarter results, highlighting continued improvement in the company’s position in the retail segment, according to BofA Securities.

The Overstock Analyst: Ryan Gee maintained a Buy rating for Overstock, while raising the price target from $91 to $105.

The Overstock Thesis: The quarterly results indicate the increased mindshare the company had gained during the pandemic is “having a lasting, positive impact on buyer behavior,” Gee said in the note.

“Retail accelerated to up 94% Y/Y in 1Q from up 89% Y/Y in 4Q and was ahead of overall Home Furnishings (~70% Y/Y) for the fourth consecutive Q; highlighting further share gains. OSTK shared a range of new KPI’s that increases comparability to peers increases our appreciation for the Retail turnaround,” he added.

Although management declined from issuing guidance, they noted that April trends were “good” and sounded optimistic about achieving “the same results as 2Q last year; implying growth is possible,” the analyst mentioned.

Gee expressed optimism around Overstock generating growth in 2021 and 2022, while sustaining margins of 5%-6%.

OSTK Price Action: Shares of Overstock rose by 6.04% to $78.97 at the time of publication Friday morning.

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