Overstock’s 2Q19 results beat on the bottom-line; tZERO hoping to hit its stride moving forward

Quick Take

  • Quarterly revenue of $374 million misses the Street’s estimate of $377 million, but an EPS loss of $0.69 a share beats by $0.10
  • Shares rose by 18% on Friday as a result of retail outperformance
  • Cash may be a headwind within the next 12 months unless the company returns to positive operating cash flows given tZERO and it’s other blockchain portfolio companies’ funding needs
  • tZERO’s revenues year to date have been modest, but will likely elevate within the next few quarters as it adds more security tokens to the platform and opens its own TZROP token to retail investors

Following Overstock’s ($OSTK) better than expected 2Q19 earnings results, the stock rose over 18% last Friday to $25.19 a share. Although the retail business continued to produce a quarterly net loss, the loss was not as significant as the Street had expected (-$0.69 a share vs. the estimate of -$0.79 a share) as a result of reduced marketing spend.