Overstock.com, Inc.: Strong price momentum but will it sustain?

Overstock.com, Inc. relative valuation is OVERVALUED and it has a fundamental analysis score of 59.

Our analysis is based on comparing Overstock.com, Inc. with the following peers – Amazon.com, Inc., EVINE Live Inc. Class A, Gaia, Inc. Class A, eBay Inc., Ross Stores, Inc., Wal-Mart Stores, Inc., Sears Holdings Corporation, PCM, Inc., TJX Companies Inc and Target Corporation (AMZN-US, EVLV-US, GAIA-US, EBAY-US, ROST-US, WMT-US, SHLD-US, PCMI-US, TJX-US and TGT-US).

Overstock.com, Inc. has shown overwhelming performance overall, both over the last one year (at 223.53%) as well as over the last month (at 3.48%). While Overstock.com, Inc.’s share price has grown more over the last year than it has over the last month, the stock has done worse than its overall peer group over the last month.

Company Snapshot

  • Compared to peers, relative outperformance over the last year has faded more recently.
  • It currently trades at a Price/Book ratio of (8.61).
  • The market expects faster earnings growth from OSTK-US than from its peers and also a turnaround in its current ROE.
  • OSTK-US has relatively low net profit margins while its asset efficiency is relatively high.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, OSTK-US’s return on assets has eroded from above median to below median among its peers suggesting declining relative operating performance.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • Compared with the peers chosen, OSTK-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company is likely overinvesting in a business with only median returns.
  • OSTK-US’s operating performance may not allow it to raise additional debt.
  • Our analysis rates Overstock.com, Inc. as OVERVALUED relative to its peers.

Share Price Performance

Compared to peers, relative outperformance over the last year has faded more recently.

OSTK-US’s change in share price of 223.53% for the last 12 months is better than its peer median. However, the 30-day trend in its share price performance of 3.48% is now around the peer median suggesting that the company’s recent performance has faded relative to peers.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

Overstock.com, Inc.’s price of USD 55 is greater than CapitalCube’s implied price of USD 21.83. At this level, CapitalCube believes that Overstock.com, Inc. is overvalued. Over the last 52 week period, the stock has fluctuated between USD 13.75 and USD 65.70.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

Overstock.com, Inc. provides on-line shopping commercial site. It sells these products through their Internet websites include www.overstock.com, www.o.co and www.o.biz. The company operates through two segments: Direct Business and Partner Business. The Direct business segment includes sales made to individual consumers and businesses, which are fulfilled primarily from the company’s warehouse in Salt Lake City, Utah. The Partner business segment sells merchandise of other retailers, cataloguers or manufacturers primarily through company’s website. The company was founded by Patrick Michael Byrne on May 5, 1997 and is headquartered in headquartered in Salt Lake City, UT.

Disclaimer

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