The Lovesac Company (LOVE) AI Stock Analysis

• Market Cap: $253.74M
• Dividend Yield: N/A
• Average Volume (3M): 400.50K
• Price to Earnings (P/E): 24.8
• Beta (1Y): 2.01
• Revenue Growth: -0.77%
• EPS Growth: -8.89%
• Country: US
• Employees: 920
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -0.73
• Shares Outstanding: 14,549,118
• 10 Day Avg. Volume: 501,316
• 30 Day Avg. Volume: 400,502
• PEG Ratio: -0.32
• Price to Book (P/B): 1.95
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -8.05
• Enterprise Value/Market Cap: 1.94
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 1.25
• Enterprise Value/Ebitda: 4.69
• 1Y Price Target: $32.00
• Price Target Upside: 83.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 61 Neutral
• Price Target: $17.50 ▲(0.29%Upside)

The overall stock score reflects strong earnings call performance and solid financial health, tempered by weak technical indicators and valuation concerns. The company's positive product innovation and revenue growth are significant strengths, while the technical analysis suggests potential short-term challenges.

Positive Factors

Partnerships

The end of the partnership with Best Buy allows the company to focus on its own showroom and digital ecosystem, enhancing long-term profitability and brand control.

Product Innovation

The introduction of new products like Evercouch and Recliner, alongside target marketing, is expected to drive improved performance in the second half of the fiscal year.

Valuation

The company's valuation is considered attractive at current levels, trading at a lower multiple compared to the peer average, supporting the Buy rating.

Negative Factors

Guidance

F2Q guidance for The Lovesac Company misses expectations.

Inventory Challenges

Profitability was below consensus, in part reflecting softer-than-expected gross margins as the company works through China-based inventory.

Profitability

The company's profitability metrics for the upcoming quarter are below expectations, impacting the stock negatively.

The Lovesac Company Business Overview & Revenue Model

Company Description

The Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and accessories comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. As of January 30, 2022, the company operated 146 showrooms. It markets its products primarily through lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, kiosks, mobile concierges, and street locations in 39 states of the United States; and in store pop-up- shops and shop-in-shops. The Lovesac Company was founded in 1995 and is headquartered in Stamford, Connecticut.

How the Company Makes Money

The Lovesac Company generates revenue through the sale of its core products: Sactionals and Sacs. Sactionals are modular sofas that allow customers to purchase different pieces and covers to create customized configurations, offering flexibility and longevity. Sacs are bean bag chairs available in various sizes and covers. The company's revenue model is primarily direct-to-consumer, facilitated through its online store and showrooms. Lovesac also generates income from sales of accessories and covers, which allow customers to refresh or modify their furniture's appearance. Strategic partnerships with technology companies have allowed Lovesac to integrate audio and other tech features into its products, potentially increasing their appeal and value proposition. The company's focus on sustainable and high-quality materials also helps differentiate its offerings in a competitive market.

The Lovesac Company Financial Statement Overview

Summary

The Lovesac Company demonstrates solid financial performance with strong profitability and efficient cash flow management. However, the increase in leverage and recent revenue decline pose potential risks. Continued focus on revenue growth and managing debt levels will be crucial for sustaining financial stability.

Income Statement

The company's income statement shows strong profitability with a consistent gross profit margin over the years. The net profit margin has improved significantly since 2020, indicating better cost management. However, revenue growth has been volatile, with a decline in the most recent year. The EBIT and EBITDA margins remain healthy, supporting overall profitability.

Balance Sheet

The balance sheet reflects moderate financial health. The debt-to-equity ratio has increased, suggesting higher leverage and potential risk. Return on equity is positive, indicating efficient use of shareholder funds. The equity ratio is stable, reflecting a solid financial foundation, although the increasing liabilities warrant close monitoring.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth in recent years, recovering from previous negative figures. The operating cash flow to net income ratio is favorable, indicating effective cash generation from operations. However, the free cash flow to net income ratio shows some volatility, suggesting potential challenges in capital expenditure management.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
680.63M	700.26M	651.54M	498.24M	320.74M
	Gross Profit
397.83M	388.44M	345.83M	273.35M	174.77M
	EBIT
13.65M	30.08M	39.02M	38.44M	14.88M
	EBITDA
28.36M	42.68M	47.81M	46.30M	21.49M
	Net Income Common Stockholders
11.56M	23.86M	26.49M	47.49M	14.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
83.73M	87.04M	43.53M	92.39M	78.34M
	Total Assets
532.25M	482.18M	418.05M	371.58M	171.02M
	Total Debt
183.02M	175.50M	157.85M	112.96M	0.00
	Net Debt
99.29M	88.47M	114.32M	20.56M	-78.34M
	Total Liabilities
315.89M	264.68M	224.79M	215.35M	63.07M
	Stockholders Equity
216.35M	217.50M	193.26M	156.23M	107.95M
Cash Flow		Free Cash Flow
17.95M	47.23M	-46.92M	17.53M	31.47M
	Operating Cash Flow
38.98M	76.44M	-21.38M	34.02M	40.52M
	Investing Cash Flow
-21.52M	-29.21M	-25.55M	-16.49M	-9.05M
	Financing Cash Flow
-20.76M	-3.73M	-1.94M	-3.48M	-1.67M

The Lovesac Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOVE, the sentiment is Negative. The current price of 17.45 is below the 20-day moving average (MA) of 19.02, below the 50-day MA of 19.27, and below the 200-day MA of 24.06, indicating a bearish trend. The MACD of -0.48 indicates Positive momentum. The RSI at 40.15 is Neutral, neither overbought nor oversold. The STOCH value of 12.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOVE.

The Lovesac Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FLXS	73 Outperform	$183.19M	13.67	9.48%	1.96%	7.24%	-9.51%
KEQU	73 Outperform	$107.47M	6.22	33.52%	―	9.44%	102.67%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%
LOVE	61 Neutral	$253.74M	24.84	6.73%	―	-0.77%	-8.89%
BSET	54 Neutral	$134.65M	―	-3.83%	5.08%	-11.78%	-13.89%
HOFT	53 Neutral	$109.75M	―	-5.55%	9.04%	-3.89%	-391.05%
SNBR	43 Neutral	$172.90M	―	9.10%	―	-12.36%	37.69%

The Lovesac Company Corporate Events

Lovesac Receives Preliminary Approval for Settlement

On June 3, 2025, the United States District Court for the District of Connecticut granted preliminary approval for a proposed settlement in the consolidated derivative actions involving The Lovesac Company. The settlement addresses claims of fiduciary breaches and other misconduct by Lovesac’s officers and directors related to financial misstatements and internal control weaknesses. If approved, the settlement will result in corporate governance reforms and the release of all related claims, providing substantial benefits to Lovesac and its shareholders.

The most recent analyst rating on (LOVE) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on The Lovesac Company stock, see the LOVE Stock Forecast page.

Lovesac Elects Board Directors, Fails Compensation Approval

At the 2025 Annual Meeting of Stockholders held on June 10, 2025, The Lovesac Company elected six directors to its Board, with Shawn Nelson receiving the highest votes. However, the advisory approval for the fiscal 2025 compensation for named executive officers was not passed, while the appointment of Deloitte & Touche LLP as the independent auditor for the fiscal year ending February 1, 2026, was ratified.

The most recent analyst rating on (LOVE) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on The Lovesac Company stock, see the LOVE Stock Forecast page.

Lovesac Announces Board Member Resignation

On May 22, 2025, The Lovesac Company announced that Mr. John Grafer will resign from the Board of Directors and all its committees, effective June 10, 2025, coinciding with the company’s annual meeting. His resignation is not due to any disagreements with the company’s operations, policies, or practices.

The most recent analyst rating on (LOVE) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on The Lovesac Company stock, see the LOVE Stock Forecast page.

The Lovesac Company Announces Board Member Resignation

On April 3, 2025, The Lovesac Company announced that Jack A. Krause will resign from its Board of Directors after the annual meeting of stockholders on June 10, 2025. His resignation is not due to any disagreements with the company’s operations, policies, or practices, suggesting a smooth transition and continuity in the company’s governance.