Davidson analyst Tom Forte maintained his buy rating on Overstock's shares but doubled his target price from $33 to $66 per share. The analyst's sum-of-the-parts stress tests showed that the e-commerce division should be worth approximately $42 per share on its own, and the blockchain family of businesses could add up to $21 per share. Overstock's cash reserves and physical assets account for the remaining $3 per share.
The main driver of Forte's boosted value view comes from the e-commerce sector, whose value rose to $42 from $9 per share in his previous analysis. Surging online retail trends due to the COVID-19 pandemic played a part in this upgrade, but so did Overstock's revamped business plan under new management and a large contract with the federal government. Forte even argued that his price target might be too conservative since Overstock's peers in the e-commerce sector typically trade at far richer price-to-sales multiples.
One bullish analyst is not the same thing as a successful turnaround story, but DA Davidson's rosy view is joining a growing Greek chorus here. Overstock's shares have gained a thrilling 375% so far in 2020 and an even sharper 1,230% from the market bottom in March.