7 Reasons Why This Overstock Analyst Is Bullish

Overstock.com Inc OSTK is showing revenue growth acceleration and gaining market share due to both external and internal factors, according to Needham.

The Overstock Analyst: Rick Patel initiated coverage of Overstock with a Buy rating and $96 price target. 

The Overstock Takeaways: While the shift toward e-commerce has accelerated, the home category is being driven by consumer nesting, which should continue, Patel said in a Monday initiation note.

The analyst named seven reasons for the Buy rating:

  • Macro data and company commentary suggest continued strength for the home category in the near-term. 
  • Needham’s proprietary consumer survey says the strength of the home category is set to continue this fall.
  • The total addressable market for home products is growing, with digital players gaining share at the expense of traditional retail.
  • Overstock has a more focused strategy that should benefit the company via self-help initiatives. 
  • Overstock’s new GSA contract with the government expands its market further through B2B commerce.
  • Strong growth should drive expense leverage, leading to higher adjusted EBITDA.
  • The company’s non-core businesses, tZERO and Medici Ventures, create optionality through blockchain technologies.

OSTK Price Action: Shares of Overstock were trading 14.79% higher to $74.78 at last check Monday. 

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