Qurate retail stocks have a lot of pessimism pent up that needs to be liquidated
Qurate Retail, Inc. (NASDAQ: QRTEA) is an American media conglomerate and one of the leading e-commerce retailers in North America. The company consists of seven retail brands: QVC, HSN, Zulily, Ballard Designs, Frontgate, Garnet Hill and Grandin Road. You can reach around 218 million households worldwide via 14 television channels with multiple streaming services. While QVC has always been a staple of the 80s and 90s, the company has adapted admirably with the times.
Qurate Retail stocks are up 249% over the past 12 months. That includes a six-year high from May 14th of $ 14.62. However, analysts remain on the sidelines as the two brokers maintain a lukewarm “hold” rating in their reporting. However, more profits could be made from a quick press considering a healthy 6% of QRTEA’s total available float is being sold short. At the average trading pace of the stock, it would take six days for the bearish bets to buy back.
Fundamentally, however, Qurate Retail stock isn’t the safest on the market, although earnings expectations have been consistently exceeded in all four of the company’s most recent quarterly reports. QRTEA has total debt of $ 8.29 billion and only $ 739 million in cash, which could create potential long-term problems for the company.
Qurate Retail also struggled to find bottom line consistency, although sales growth has been fairly consistent over the past few years. In fiscal 2018, QRTEA’s net income decreased 24% and the following year net income decreased by $ 1.372 billion, resulting in a net loss of $ 456 million for Qurate Retail for the 2019 fiscal year. However, QRTEA rebounded significantly in fiscal 2020 as a buyer turned to the internet during the Covid-19 pandemic. The company posted net income of $ 1.2 billion, an increase of $ 1.66 billion over the previous year. In addition, Qurate Retail’s trailing 12-month net income has already increased by 18.8% compared to fiscal 2020.
QRTEA is currently trading at an extremely attractive price-earnings-ratio of 4.02, while the forward price-earnings-ratio of 8.76 is also an excellent value. Overall, Qurate Retail stock is undeniably undervalued right now, and QRTEA is likely to keep its valuation higher, at least in the short term.
After all, security is Schaeffer’s Volatility Scorecard (SVS) scores 70 out of a possible 100, which means the stock tends to exceed those volatility expectations – a good thing for option buyers.