Is QRTEA stock a buy?

Is it time for a turnaround for Qurate Retail (Qurate Retail Stock Quote, Charts, News, Analysts, Financials NASDAQ:QRTEA)? 

Colorado-based digital business conglomerate Qurate Retail has seen its share price drop from upwards of $13 per share as of mid-2021, but the stock has been in free-fall ever since, sliding into sub-$1.00 territory over the past few months.

Where QRTEA goes after this is unclear, but getting a grasp of the company’s long and colourful history is important in charting its path ahead.

Liberty Interactive began in the early ‘90s as a subsidiary of Tele-Communications Inc, with a focus on the cable TV service provider industry. That grew into the early phases of e-commerce in the late 1990s and early 2000s, where Liberty acquired a wide range of businesses, including online shopping platforms QVC and the Home Shopping Network (HSN) and interests in travel sites Expedia and TripAdvisor. The latter were spun out in the mid-2010s, while Liberty took on zulily, online retailer for flash sales and daily deals and geared at women shoppers. 

In 2017, Liberty rebranded as Qurate Retail and acquired e-commerce platforms in Ballard Designs and then interests in ILG and FTD and later Cornerstone. More recently, Qurate made the big decision earlier this year to sell zulily, which had gone through restructuring, a reduction in workforce and recent declines in revenue. The company said it aims to sharpen its focus now on a few key ingredients to the Qurate ecosystem.

“[The zulily divestiture] will allow our management team to better focus on our core video commerce assets, QVC and HSN, and the Cornerstone Brands, while preserving liquidity to further strengthen our balance sheet,” said President and CEO David Rawlinson in a press release in late May.

Qurate beat analysts’ expectations in its latest earnings report, with the market reacting by lifting the stock over 25 per cent in trading in early May. Quarterly earnings for the company’s Q1 were $0.05 per share compared to $0.00 per share a year earlier, whereas analysts had on average been expecting a loss of $0.08 per share. 

Revenue was also a surprise to the upside at $2.64 billion compared to $2.56 billion called for by the Street.

“Our turnaround is underway and we expect to see material improvement in our profitability in the back half of this year,” said Rawlinson in a press release. “We continue to have strong liquidity and believe our capital structure has the runway to get us through this transition.”