Please ensure Javascript is enabled for purposes of website accessibility Shares Jump on Strong Earnings

By Jeremy Bowman - Updated Nov 17, 2016 at 4:25PM

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

Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of (OSTK 14.40%) were going through the roof today, climbing as much as 36% after thrashing earnings estimates in its first-quarter report.

So what: The online retailer, which has struggled to turn a profit against the likes of, posted net income of $0.32 a share in the quarter, up from $0.12 a year ago, and well ahead of analyst estimates at $0.13. Revenue also flew past expectations of $282.3 million, climbing 19%, to $312 million. Gross margin improved by 80 basis points, to 18.9%, and nearly all the revenue gains came from fulfillment partner relationships and growth in order size. Management did not provide comment in the press release.

Now what: Overstock's CEO Patrick Byrne also returned earlier this week from a two-month medical absence. It's unclear if there was a specific impetus for Overstock's strong performance, but with a such a narrow profit a year ago at $2.7 million, the company has significant operational leverage, meaning that profits were poised to double or triple with revenue growth. Amazon's decision to begin collecting sales tax in certain states may have also given Overstock some extra business. Amazon shares were off 3.6% today after rival EBay provided disappointing guidance in its quarterly report , falling more than 5% as a result.

Want more on Add the company to your Watchlist by clicking right here.

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.
$29.48 (14.40%) $3.71

*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 service.

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 05/25/2022.

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.