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Overstock (OSTK) to Report Q2 Earnings: What's in Store?

Read MoreHide Full Article Inc. (OSTK - Free Report) is expected to report second-quarter 2018 results on Aug 2.

In the last reported quarter, the company reported a loss of $1.74 per share compared with a loss of 23 cents in the year-ago quarter. Net Sales increased 3% year over year to $445.3 million.

Notably, shares of Overstock have returned 129.1% over a year, outperforming with the industry’s rally of 39.7%.

For the second quarter, the Zacks Consensus Estimate for revenues is pegged at $474.15 million. Further, the consensus estimate for the company is pegged at a loss of 82 cents.

Let’s see how things are shaping up for this quarter.

Gaining Momentum in Blockchain Space

Overstock’s continued efforts toward expansion of product offerings are likely to improve its market share and strengthen customer base. This is likely to drive the company’s top-line growth in the to-be reported quarter.

With the emerging trend of blockchain worldwide, the company’s strong focus on enhancing the portfolio of blockchain securities bodes well.

Overstock’s tZERO platform is likely to drive the top line in the to-be reported quarter, driven by its initial coin offering. tZERO’s prototype for its token trading platform remains positive.

Further, Overstock entered into a joint venture with BOX Digital Markets during the second quarter in order to develop a regulated exchange for security tokens trading.

Moreover, Overstock’s decision of selling off its home e-commerce business will aid the company in focusing more on its core retail as well as blockchain business. Further, the company remains optimistic about its DeSoto platform.

Additionally, the company is positioned well in the blockchain space with the aid of its FinTech investments portfolio. This portfolio is comprised of investments in those companies which are leveraging blockchain technology; consequently this will aid revenue generation.

We believe these endeavors are likely to benefit the company’s second-quarter results. However, intensifying competition in the retail sector poses a serious threat to the company’s market position.

Moreover, changes made by Alphabet’s Google in its search algorithms remains a concern for the sales growth of the company. However, Overstock has allocated its resources to address this challenge.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, Overstock carries a Zacks Rank #3 but has an Earnings ESP of 0.00%. Consequently, surprise prediction is difficult.

Stocks That Warrant a Look

Here are few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Applied Materials (AMAT - Free Report) has an Earnings ESP of +0.95% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA (NVDA - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3.

Agilent Technologies (A - Free Report) has an Earnings ESP of +0.88 and a Zacks Rank #3.

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