Overstock.com (OSTK)

Overstock.com (OSTK - Snapshot Report) managed to turn a profit for the fourth quarter, but we were less than impressed. The company received a one-time gain of $1.8 million to its gross profit that enabled the company to report a $0.04 per share profit instead of a loss of $0.04 per share.

In addition, the company's sales declined 13% year-over-year. This decline was due in large part to management cutting its marketing spend by 40%. The company plans to keep those marketing costs steady, and that will produce flat to down sales for the company in 2009.

Meanwhile, Overstock.com will be ramping up its technology and general and admin expenses. In our view, this will result in a revenue decline of 2% and a larger of net loss of $0.74 per share. We reiterate our Sell rating and lower our target price from $7 to $5.