What Happened:
Shares of online home goods retailer Overstock (NASDAQ: OSTK) jumped 5.2% in the morning session after the company reported first-quarter revenue, earnings per share (EPS), and operating profits that beat analysts' expectations. However, user growth continues to decline. Nevertheless, this is welcome revenue beat for the company, which has been inconsistent in quarterly revenue performance vs. Consensus expectations in the last few years. Additionally, management noted that "its revenue trend improved each month during the quarter, with a more meaningful improvement in late Q1."
What is the market telling us:
Overstock's shares are very volatile and over the last year have had 54 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 6 days ago, when the company dropped 7.94% on the news that analyst Peter Keith of Piper Sandler cut the stock's rating from Overweight (Buy) to Neutral (Hold) and lowered the price target from $29 to $19. The target price implies an 8% premium compared to the current price.
Overstock is up 9.75% since the beginning of the year, but at $20.70 per share it is still trading 47.1% below its 52-week high of $39.10 from May 2022. Investors who bought $1,000 worth of Overstock's shares 5 years ago would now be looking at an investment worth $557.74.
Is now the time to buy Overstock? Access our full analysis of the earnings results here, it's free.