Overstock (NASDAQ:OSTK) shares were down sharply Tuesday morning after Stifel Nicolaus analyst Scott Devitt cut his rating on the stock to Sell from Hold on a valuation basis.
Devitt notes that the online retailer’s shares through Monday night had gained more than 75% in the past two months, and reached more than a 60% premium to his $22 price target.
Overstock reported results on Friday. Devitt is looking for revenue of $156.8 million, EBITDA of negative $1.8 million and a cash loss per share of 45 cents. For 2007, he looks for $771 million in revenue, $2 million in EBITDA and a cash loss of $1.83. For 2008, he sees $846.5 million in revenue, $11.7 million in EBITDA and a loss of 59 cents.
Devitt says he would consider buying the stock “on pullbacks into the upper teens or if our expectations for growth are proven conservative.”
That would have to be quite a pullback.
OSTK 1-yr chart: