- Needham keeps a Buy rating on Overstock.com (NASDAQ:OSTK) after factoring in the Q4 earnings report.
- Analyst Rick Patel: "Sales growth from 4Q has continued into 1QTD, but we view it’s prudent to model slower growth in ’21 on tough comparisons. OSTK has benefited from a significant uptick in new customer growth, so its goal is retention. OSTK also appears confident in preserving its MSD% adj. EBITDA in ‘21; we view this as achievable as it’s likely to flex opex as sales slow. LT, we still see growth from secular shifts (U.S. furniture/home furnishings online penetration was 35% in ’20 vs 50%+ for multiple consumer categories), expansion in Canada, and the GSA contract (beyond ‘21)."
- Patel says those factors and attractive valuation on OSTK for 0.8 EV to sales keeps the firm bullish.
- Meanwhile, Bank of America upgrades Overstock to a Buy rating from Neutral.
- BofA: "Overstock is prioritizing sustainable, profitable growth rather than the potentially costly pursuit of category reach and leadership which we feel puts the company on a morepromising trajectory than any point in recent memory. With a new management team, a sharper focus on the Home Furnishings category, and secular tailwinds, we see the foundation for a near-term profit inflection that coincides with a return to top-line growth."
- Shares of Overstock.com are up 3.52% premarket after a post-earnings tumble yesterday of 17.26%.