Overstock.com, Inc. (OSTK) a Triple-Digit Winner, But Can It Continue?

It’s been a great  months for investors in e-commerce store Overstock.com, Inc. (NASDAQ:OSTK), as the stock has rocketed up more than 330%. The momentum didn’t stop in last week’s earnings release, either, as sales climbed double digits and earnings were up a ridiculous 687%. For six consecutive quarters, the company has increased revenue growth, fueling the bullish speculation behind the stock. With the major turnaround behind it, and other signs of stabilization, the question is whether Overstock still offers growth-hungry investors an attractive investment. Let’s take a look at recent earnings and guidance for clues.

Trailing strong
There was little to be discouraged about regarding Overstock.com, Inc. (NASDAQ:OSTK)’s second-quarter report. Sales rose 22% to $293.2 million. Margins improved all the way down the income statement to net income, where the company hauled in $3.7 million — or $0.15 per share. In the year-ago quarter, that number was just $470,000, or $0.02 per share. Management partially credits this performance to higher-margin items, along with a successful cost-control policy.

In the past 12 months, the company has generated $46 million in free cash flow, implying a trailing P/FCF of more than 17. The company seems to be capitalizing well on the shift to mobile, with 35% of traffic generated from the devices, and nearly 20% of sales coming from them as well.

The balance sheet remains attractive, with zero long-term debt.

The most interesting source of growth for the company, now that the warehousing cost control has been completed, is international. Overstock.com, Inc. (NASDAQ:OSTK) doesn’t have an international presence, but management mentioned that this current quarter will see the first rollout of an international sales effort. Investors will want to keep a close eye on this specific development, as it may lead the way in justifying the company’s relatively rich valuation.