As of May 22, 2025, Overstock.com Inc's estimated intrinsic value ranges from $14.12 to $46.53 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $46.53 | +177.3% |
| Discounted Cash Flow (5Y) | $38.40 | +128.9% |
| Dividend Discount Model (Multi-Stage) | $14.12 | -15.9% |
| Earnings Power Value | $32.06 | +91.1% |
Is Overstock.com Inc (OSTK) undervalued or overvalued?
With the current market price at $16.78, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Overstock.com Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.67 | 0.78 |
| Cost of equity | 7.5% | 9.8% |
| Cost of debt | 7.0% | 7.0% |
| Tax rate | 1.6% | 2.7% |
| Debt/Equity ratio | 0.05 | 0.05 |
| After-tax WACC | 7.5% | 9.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $38 | $1,433M | 78.5% |
| 10-Year Growth | $47 | $1,801M | 60.2% |
| 5-Year EBITDA | $22 | $695M | 55.7% |
| 10-Year EBITDA | $31 | $1,078M | 33.5% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $97M |
| Discount Rate (WACC) | 9.7% - 7.5% |
| Enterprise Value | $999M - $1,293M |
| Net Debt | $(307)M |
| Equity Value | $1,305M - $1,600M |
| Outstanding Shares | 45M |
| Fair Value | $29 - $35 |
| Selected Fair Value | $32.06 |
| Metric | Value |
|---|---|
| Market Capitalization | $760M |
| Enterprise Value | $453M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 4.60 |
| Current Dividend Yield | 1.39% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.05 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $13.96 |
| Discounted Cash Flow (5Y) | 29% | $9.60 |
| Dividend Discount Model (Multi-Stage) | 24% | $2.82 |
| Earnings Power Value | 12% | $3.21 |
| Weighted Average | 100% | $34.81 |
Based on our comprehensive valuation analysis, Overstock.com Inc's weighted average intrinsic value is $34.81, which is approximately 107.5% above the current market price of $16.78.
Key investment considerations:
Given these factors, we believe Overstock.com Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.