This Analyst Sees 4 Near-Term Risks For Overstock

Overstock.com Inc’s OSTK revenues through 2022 are likely to be under much more pressure than earlier anticipated throughout this year, according to BofA Securities.

The Overstock Analyst: Curtis Nagle downgraded the rating for Overstock from Buy to Neutral, while reducing the price target from $85 to $38.

The Overstock Thesis: The 2022 estimate has been reduced from a 4% decline in revenues to a 9% decline, versus the guidance of high-single-digit growth, Nagle said in the downgrade note.

He mentioned four risks for Overstock in the nearer term:

• Soft middle-income spend on furnishings
• Deceleration in Overstock’s web traffic through mid-April
• Tough comps on a three-year basis
• A cold and wet start to spring, which could hurt outdoor furniture sales

Also Read: Alibaba Continues Restructuring; CEO Daniel Zhang Steps Down From Tmall, Taobao

“Over the next several years, we see opportunities for revenue expansion, but given low visibility in the near to medium term, we do not expect the shares to re-rate until growth stabilizes,” the analyst wrote.

OSTK Price Action: Shares of Overstock had declined by 2.37% to $32.89 at the time of publication Monday.

Photo: Courtesy of Alt Summit on Flickr