What's In The Offing For Overstock (OSTK) In Q1 Earnings?

Overstock.com, Inc. (NASDAQ:OSTK) is expected to report first-quarter 2018 results on May 3.

In the last reported quarter, the company reported a loss of $3.72 per share as against earnings of 12 cents in the year-ago quarter. Net Sales decreased 13.2% year over year to $456.3 million.

Notably, shares of Overstock have lost 39% year-to-date, as compared with the industry’s rally of 17.7%.

For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $454.1 million. Further, the consensus estimate shows a loss of 87 cents for the company.

Let’s see how things are shaping up for this quarter.

Factors at Play

Overstock’s continuous efforts on expanding product offering are likely to boost the customer base. This will is likely to generate more revenues on the platform.

Also, the company recently introduced augmented reality within its shopping app powered by Google’s ARCore technology. This will provide customers with accurate information about the product that they are looking to buy with enhanced picture of it on their mobile. This is likely to boost the customer base of the company.

Further, the company’s strong focus on enhancing the portfolio of blockchain securities bodes well with the emerging trend of blockchain across the world. DeSoto, Bitt and tZERO are expected to perform well and drive results in the quarter under review.

Moreover, Overstock’s decision of selling off its home e-commerce business will benefit the company in focusing more on its core retail as well as blockchain business.

Additionally, its FinTech investments portfolio which is comprised of investments in those companies which are leveraging blockchain technology remain positive for the company’s gaining momentum in the market.

Overstock’s tZERO platform is likely to drive the top-line in the going-to-be reported quarter, courtesy given to its initial coin offering. Recently, tZERO unveiled a prototype for its soon-to-be-launched token trading platform, which remains positive.

We believe these endeavors will continue to benefit the company’s results in the quarter under review. However, intensifying competition in the retail sector poses a serious threat to the company’s market position.

Earnings Whispers

Our proven model does not show that Overstock will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 87 cents. Thus the Earnings ESP of the stock is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Overstock carries a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are stocks that you may want to consider as our model shows that they have the right combination of elements to deliver an earnings beat in their upcoming release.

Microchip (NASDAQ:MCHP) has an Earnings ESP of +0.15% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arrow Electronics (NYSE:ARW) has an Earnings ESP of +0.66% and a Zacks Rank #2.

CyberArk Software (NASDAQ:CYBR) has an Earnings ESP of +3.53% and a Zacks Rank #3.

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