Overstock.com, Inc. (OSTK): How Could This Stock Still Be Attractive After Recent Appreciation?

While Overstock trades at a discount to Amazon, it lacks exposure to other high-growth markets, namely tablet and cloud, which account for its premium valuation. With eBay Inc (NASDAQ:EBAY), Overstock does trade at a premium but should as earnings growth outpaces eBay’s. Overstock has a lot of room for operating improvements where eBay has fewer levers to pull to improve earnings other than revenue growth.

Conclusion

Overstock.com, Inc. (NASDAQ:OSTK) appears to be at least fairly priced at current levels if the company can continue to execute. Investors should look to buy on any pullbacks. The risk/reward at this point appears to be in line. Historically the company is inconsistent, and a miss one quarter could lead to a large sell-off in the stock. If the long-term story is in place, investors should look at buying on the decline.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and eBay. The Motley Fool owns shares of Amazon.com and eBay. Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article How Could This Stock Still Be Attractive After Recent Appreciation? originally appeared on Fool.com and is written by Mike Thiessen.

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