Please ensure Javascript is enabled for purposes of website accessibility

A 30-Bagger in Under 5 Months, Here's Why Overstock Shares Popped Again Today

By Jon Quast – Updated Jul 30, 2020 at 12:13PM

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 company posted a profit as new customers rushed to purchase from the e-commerce platform.

What happened

Investors prescient enough to buy shares of (OSTK -0.69%) on March 16 at $2.53 per share should definitely celebrate today. As of 12:30 p.m. EDT on Thursday, the stock is up another 26% after reporting blowout results for the second quarter of 2020. 

From the absolute bottom to today's top, Overstock is a 30-bagger -- one of the most incredible runs you'll ever see in under five months.

OSTK Chart

OSTK data by YCharts. Note: this chart doesn't track from the lowest share price, only from the close on March 16.

So what

Overstock's total net revenue increased to $783 million in Q2. For perspective, it only generated $374 million last year. So net revenue more than doubled year over year. This led to a net profit of $36.4 million, a stark contrast to the $24.7 million loss the company posted last year.

Growth for Overstock has also been across the board. The company's retail segment accounts for the vast majority of its revenue, but its other segments posted growth as well. Revenue from tZero, a capital markets platform that runs on blockchain technology, surged 129% year over year. And its Medici Ventures, which also deals with blockchain technologies, saw revenue up 317%. 

A man draws an upward arrow on a stock chart displayed on a transparent touchscreen.

Image source: Getty Images.

Now what

When researching stocks, understanding customer metrics is important. For Overstock, there are a few encouraging data points for investors to consider. First-time customers for Overstock's retail business were up 205% from last year. People using tZero's crypto app are up 100% so far in 2020. And the company was also recently selected to help build a business-to-business e-commerce platform for the U.S. government. 

All of this suggests Q2 wasn't a fluke. If Overstock can retain the new business it's acquired during the COVID-19 pandemic, then its eye-popping stock gains from 2020 lows certainly look justified. That's something for shareholders to monitor in coming quarters.

Jon Quast 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.
$24.35 (-0.69%) $0.17

*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 10/01/2022.

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.