This Analyst Sees 4 Near-Term Risks For Overstock

Overstock.com Inc’s (NASDAQ: 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

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“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.

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