Shopify (NYSE:SHOP) versus Overstock.com (OSTK) Head-To-Head Contrast

Overstock.com (NASDAQ: OSTK) and Shopify (NYSE:SHOP) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitabiliy, institutional ownership and earnings.

Insider & Institutional Ownership

43.2% of Overstock.com shares are held by institutional investors. Comparatively, 61.3% of Shopify shares are held by institutional investors. 28.9% of Overstock.com shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Overstock.com and Shopify, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Overstock.com 0 0 1 0 3.00
Shopify 1 14 20 0 2.54

Overstock.com currently has a consensus price target of $25.00, indicating a potential upside of 54.32%. Shopify has a consensus price target of $79.45, indicating a potential downside of 12.29%. Given Overstock.com’s stronger consensus rating and higher possible upside, analysts clearly believe Overstock.com is more favorable than Shopify.

Profitability

This table compares Overstock.com and Shopify’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Overstock.com -0.37% -2.35% -0.88%
Shopify -9.01% -11.26% -9.26%

Risk and Volatility

Overstock.com has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Shopify has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Valuation & Earnings

This table compares Overstock.com and Shopify’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Overstock.com $1.82 billion 0.22 $1.80 million ($0.27) -60.00
Shopify $443.99 million 18.65 -$29.80 million ($0.46) -196.91

Overstock.com has higher revenue and earnings than Shopify. Shopify is trading at a lower price-to-earnings ratio than Overstock.com, indicating that it is currently the more affordable of the two stocks.

Summary

Overstock.com beats Shopify on 9 of the 13 factors compared between the two stocks.

Overstock.com Company Profile

Overstock.com, Inc. is an online retailer and incubator of blockchain technology. Through its online retail business, the Company offers a range of price-competitive brand name, non-brand name and closeout products, including furniture, home decor, bedding and bath, housewares, jewelry and watches, apparel and designer accessories, health and beauty products, electronics and computers, and sporting goods. It operates Retail and Medici businesses. Its Retail business consists of its Direct and Partner segments. Its Other segment consists of Medici. The Company also sells various books, magazines, compact discs (CDs), digital versatile discs (DVDs) and video games. The Company sells these products and services through its Internet Websites located at www.overstock.com, www.o.co and www.o.biz. The Company’s other offerings include Worldstock Fair Trade, Main Street Revolution, Farmers Market, Pet Adoptions, Insurance and Supplier Oasis.

Shopify Company Profile

Shopify Inc. (Shopify) provides a cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. The Company offers subscription solutions and merchant solutions. The Company’s software is used by merchants to run their business across all of their sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts and marketplaces. The Shopify platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics and reporting all from one integrated back office. The Shopify platform includes a mobile-optimized checkout system, which is designed to enable merchants’ consumers to buy products over mobile Websites. Its merchants are able to offer their customers the ability to check out by using Apple Pay.

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