Overstock.com shares fell Wednesday after analysts at Needham downgraded the e-commerce company to Hold from Buy, citing concerns over declines in market share.

Inventories are expected to remain high this year, putting pressure on companies to offer discounts to make sales, analysts led by Anna Andreeva wrote in a research note published Wednesday. That will force the online furniture seller to battle larger rivals, including Amazon.com (AMZN) and Wayfair (W), who "still promote aggressively," she wrote.

Overstock.com "gets lost in the aggressive promotional tenor of a larger competitor," the note said, referring to Wayfair. Overstock.com "has done a commendable job controlling expenses," Andreeva said, noting that she doesn't see room for further cost cuts should sales remain under pressure.

The note didn't include a price target for Overstock.com shares. Needham's previous target was $30, while the shares were down 5.2% to $17.89 on Wednesday. Over the last 12 months, the stock has tumbled about 67%.

The company didn't immediately respond to a request for comment.

In October, Overstock.com posted a third-quarter revenue decline of 33% from the same period in the prior year. The number of active customers also slid 33%, and the number of orders delivered fell 41% The declines resulted from a management decision to stop selling goods other than furniture, strength in sales in 2021, and a downturn in consumer demand, CEO Jonathan Johnson previously told Barron's in a call.