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Overstock.com is
scheduled to report Q208 results before the market opens on July
18. Despite the economic headwinds facing online retailers, we
at
eChristianInvesting are expecting OSTK’s results to exceed
the consensus expectations.
We are
forecasting revenues of $184M versus analyst consensus of $181M.
This would represent 23% growth over last year’s revenues of
$149M in the same period.
Although
we expect that traffic levels fell sequentially during the
quarter after an impressive first quarter performance, our
checks continue to show very strong y/y growth. This is largely
due to some very favorable 2007 comps. In addition, the receipt
of government stimulus checks beginning in May should have
provided a late surge in the quarter.
Overstock’s shares have
been one of the biggest stars of the markets this year. To date,
the shares have appreciated over 78% versus a 14% drop in the
broader market indexes. Of course the big run-up in the stock
price came after last quarter’s impressive results.
Shares are
now trading at 0.6x consensus 2009 revenue estimates. Our
believe is that these estimates will probably be revised
downwards in the coming months to better incorporate the macro
concerns facing online retailers. Therefore, we continue to
remain on the sidelines in regards to
valuation of this stock despite the potential short-term
upside.
At the time this article was
published, the author did not have a financial position in any
of the stocks mentioned in this article.
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