The Lovesac Company (LOVE) AI Stock Analysis

• Market Cap: $271.31M
• Dividend Yield: N/A
• Average Volume (3M): 683.70K
• Price to Earnings (P/E): 30.5
• Beta (1Y): 2.23
• Revenue Growth: -2.80%
• EPS Growth: -49.06%
• Country: US
• Employees: 920
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 2.13
• Shares Outstanding: 14,793,504
• 10 Day Avg. Volume: 1,059,056
• 30 Day Avg. Volume: 683,695
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.39
• Price to Cash Flow (P/CF): -15.80
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.93
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.32
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $31.00
• Price Target Upside: 59.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Lovesac shows strong financial performance with robust profitability and cash flow management, but increasing leverage and a recent revenue decline are risks. Technical indicators reveal mixed signals, with short-term positive momentum but potential overvaluation concerns. The recent earnings call was positive, focusing on successful product launches and strategic initiatives, although supply chain challenges and revenue decline were highlighted.

Positive Factors

Financial Performance

Lovesac reported fiscal 4Q25 results that came in above expectations for both revenue and profitability.

Product Innovation

The company is reaping the benefits of years of strategic investment in product innovation, digital infrastructure, and customer acquisition, positioning itself to continue to take market share.

Strategic Growth

Lovesac is positioning itself to continue to take market share by driving long-term sustainable growth while generating profits and free cash flow with a strong, debt-free balance sheet.

Negative Factors

China Tariffs

The actual amount of tariff payments will likely be higher due to the increased China tariffs on products that are too near term to move out.

Macro Environment

Management attributed the softness primarily to the unfavorable macro environment, which is expected to continue, still projecting a 10% decline for the category.

The Lovesac Company Business Overview & Revenue Model

Company Description

The Lovesac Company, trading under the ticker symbol LOVE, is a high-end furniture retailer based in the United States. It specializes in designing and selling unique, modular furniture systems primarily for residential use. The company's flagship products include the 'Sactionals,' which are customizable and reconfigurable sectional sofas, and 'Sacs,' which are premium bean bag seats. Lovesac is known for its innovative use of technology and sustainable materials, striving to reduce waste and promote longevity in its furniture offerings.

How the Company Makes Money

The Lovesac Company generates revenue primarily through the direct sale of its furniture products, which are sold via its own branded showrooms, an e-commerce platform, and partnerships with third-party retailers. The company capitalizes on the premium pricing of its modular furniture systems, which attract a customer base seeking customizable and sustainable home solutions. Lovesac also engages in strategic partnerships and marketing collaborations to expand its market reach. Additionally, their focus on high-quality, durable products encourages repeat purchases and word-of-mouth referrals, further driving sales.

The Lovesac Company Financial Statement Overview

Summary

The Lovesac Company shows 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: 19.45
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 19.45 is above the 20-day moving average (MA) of 18.43, above the 50-day MA of 18.51, and below the 200-day MA of 24.98, indicating a neutral trend. The MACD of 0.54 indicates Negative momentum. The RSI at 50.64 is Neutral, neither overbought nor oversold. The STOCH value of 21.00 is Neutral, 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	71 Outperform	$172.07M	12.84	9.48%	1.98%	7.24%	-9.51%
LOVE	66 Neutral	$271.31M	30.53	5.33%	―	-2.80%	-49.06%
KEQU	61 Neutral	$89.86M	5.32	33.52%	―	9.44%	102.67%
Sector *	61 Neutral	$6.55B	11.72	3.07%	4.01%	2.66%	-21.27%
BSET	56 Neutral	$153.28M	―	-3.83%	4.42%	-11.78%	-13.89%
HOFT	48 Neutral	$90.93M	―	-5.89%	9.58%	-8.26%	-233.72%
SNBR	47 Neutral	$182.42M	―	9.10%	―	-10.87%	-33.24%

The Lovesac Company Corporate Events

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.

Spark’s Take on LOVE Stock

According to Spark, TipRanks’ AI Analyst, LOVE is a Neutral.

Lovesac’s overall stock score is 62, reflecting a mixed outlook. Strong revenue growth and strategic initiatives indicate potential, but high valuation and profitability challenges pose risks. Technical indicators suggest bearish momentum, while recent corporate events provide a positive long-term growth outlook. The combination of these factors results in a middling score, indicating cautious optimism with an emphasis on addressing profitability and valuation concerns.

To see Spark’s full report on LOVE stock, click here.