Is This E-Commerce Stock Worthy of a Buy?

OSTK is up 46% in 2021 but is facing short-term chart pressure

facebook twitter linkedin


Last month, online retailer and cryptocurrency trailblazer Overstock.com, Inc. (NASDAQ:OSTK) announced a stock repurchase program of up to $100 million of its outstanding common stock. With that in mind, is OSTK perhaps worthy of a larger play?

The equity is up 46% in 2021, but is struggling with its year-over-year breakeven level. Since July, the shares have faced overhead pressure at their 200-day moving average. That trendline could be reclaimed through a short squeeze, considering a healthy 10% of OSTK's total available float is sold short.

OSTK Stock Chart

OSTK has a very attractive valuation at first glance, with a very low price-earnings ratio of 9.20. However, analysts have placed a forward price-earnings ratio of 24.94 on OSTK, meaning the company is expected to see decrease in earnings. Overstock also reported a 20% decline in annual revenues for fiscal 2019, making the e-commerce company's growth rate appear less reliable.

Nonetheless, Overstock.com has maintained strong bottom-line growth in recent years, adding about $530 million to net income since fiscal 2018. OSTK has also experienced solid long-term growth on the top-line, increasing revenues 66% since fiscal 2017. In addition, Overstock has a strong balance sheet with $536 million in cash and $58 million in total debt. Overall, the positives seem to outweigh the negatives for Overstock stock, making it a plausible long-term growth play at a good price.

 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners