Overstock.com (OSTK) has a solid online retailing business and a bright future hidden in the Medici Ventures (MV) division. Valuing OSTK based on profitable periods results in an average PE ratio of ~40x. Bear in mind that it is not Amazon (AMZN), which would make you think that it is overvalued. But a success in advancing tZERO, flagship of MV, could lead the company to annual profits of at least $140 million in the next 10 years without taking into account other businesses in incubation. As mentioned by the management in its last earnings call, OSTK’s retail segment would return to profit mode this year. Thus, this growth may be achieved without much share dilution as future cash flows from the retail segment could support it.
Source: Schedule 14A Filing