Overstock Shares Up 1,600% This Year, As E-commerce Demand Surges During Pandemic

Shares of e-commerce company Overstock.com Inc OSTK closed at $118.13 on Monday, up from $7.04 at the start of 2020, indicating staggering year-to-date gains of close to 1,600%.

What Happened: The stock bottomed out in March 2020 amid the broader market sell-off and touched a multi-year low of $2.53. This means Overstock has gained 4,500% in less than five months.

While the COVID-19 pandemic has decimated most sectors, e-commerce companies have actually benefitted from countrywide lockdowns and business shutdowns. The pandemic accelerated the shift towards online shopping; shares of e-commerce giants Amazon.com Inc. AMZN and Shopify Inc. SHOP are also up 68% and 150% YTD, respectively.

Overstock has managed to capitalize on the online shopping trend in its home furnishing vertical. Analysts polled by Yahoo Finance expect its sales to rise 40.9% to $2.06 billion in 2020.

The Utah-based company easily outperformed analyst estimates in the June quarter as well. It reported adjusted earnings of $0.84 and revenue of $782.5 million, compared to consensus estimates of a net loss per share of $0.23 and revenue forecasts of $680.2 million.

During the Q2 earnings call, company CEO Jonathan Johnson said, “Overstock is a top player in the growing home furnishings online market, a market that is now more relevant than ever."

"Online penetration was steadily increasing prior to the pandemic, where recent pandemic-related shifts in consumer behavior have accelerated that growth,” Johnson added.

The company also experienced record trading volume on its blockchain and capital markets trading platform tZERO ATS in Q2.

Piper Sandler Upgrade: The stock rose 26.5% on Monday after Piper Sandler analyst Peter Keith initiated coverage on Overstock with an “Overweight” rating and a price target of $140. The analyst is bullish on the shifting e-commerce trends that have driven shares and profitability higher in 2020.

Photo courtesy: Overstock.com via Wikimedia