Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Overstock Jumped Today

By Evan Niu, CFA - Apr 30, 2020 at 3:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The e-commerce company reported first-quarter results and the effect COVID-19 is having on the business.

What happened

Shares of Overstock (OSTK -8.07%) have jumped today, up by 5% as of 1:30 p.m. EDT, after the company reported first-quarter earnings. The e-commerce specialist also provided investors with some updates on how the COVID-19 pandemic is impacting the business.

So what

Revenue in the first quarter declined 4% to $352 million, well above the $332.3 million in sales that Wall Street was looking for. That resulted in a net loss per share of $0.40, also better than the consensus estimate of $0.63 per share in red ink. The coronavirus has increased demand on e-commerce platforms as consumers stay home.

Person ordering online from a smartphone

Image source: Getty Images.

Newly acquired customers jumped 9% during the quarter, and mobile devices represented 46% of orders. Overstock also said that tZERO users increased 40% from the end of 2019. tZERO is the blockchain-based cryptocurrency app that Overstock launched last year.

Now what

"In a time of great uncertainty, Overstock is performing well," CEO Jonathan Johnson said in a statement. "Our retail business, which was already on track to achieve its first quarter plan before the COVID-19 crisis hit full bore, has benefited from an increased demand for home furnishings and other key product categories from customers looking to shop from the safety of their homes."

Overstock said that it has faced challenges in meeting the booming demand, in part due to "capacity issues from our shipping carriers." tZERO has not seen any interruptions but the company acknowledges that market turmoil could impact the platform. After the quarter closed, Overstock's retail sales in April have soared 120%.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
$28.48 (-8.07%) $-2.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.