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Luvu Brands Inc (LUVU)
OTHER OTC:LUVU
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Luvu Brands
(OTC:LUVU)
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Select Model
Rating:43Neutral
Price Target:
$0.03
▼(-3.33% Downside)
Action:ReiteratedDate:02/25/26
The score is held down primarily by weak financial performance—recent losses, negative operating/free cash flow, and materially elevated leverage. Technicals also lean bearish with price below longer-term moving averages and a negative MACD. Valuation is only a minor offset because the negative P/E reflects losses and there is no dividend yield support.
Positive Factors
Gross margin resilience
A ~26% gross margin indicates durable unit-level profitability and product pricing power versus direct costs. That margin provides a structural cushion to absorb SG&A and input-cost variability, improving the company’s ability to recover operating profit as revenue stabilizes.
Positive EBITDA
Positive TTM EBITDA shows core operations generate cash before non-cash charges and financing costs. This operational cash-earnings buffer supports short-term creditor confidence and provides runway for restructuring or reinvestment if management restores top-line growth.
Prior cash-generation track record
The business generated positive operating cash flow in 2022–2024, demonstrating it can produce cash under prior conditions. That historical ability implies the operating model can be cash-generative again with restored sales or cost discipline, a durable recovery pathway.
Negative Factors
Elevated leverage
Very high leverage materially reduces financial flexibility and increases default and refinancing risk. With equity thin relative to debt, any further earnings volatility or cash-flow pressure could force dilutive financing, covenant stress, or restrict investment for growth.
Negative operating & free cash flow
Consistent negative OCF and FCF erode liquidity and require external funding to service operations and debt. Given elevated leverage, continued cash consumption increases solvency risk and limits the company’s ability to finance working capital, capex, or strategic initiatives.
Sharp revenue decline
A >50% revenue decline reflects severe demand or market-share loss and weakens operating leverage. Falling sales pressure margins, reduces pricing power, and undermines the firm’s ability to deleverage, making long-term recovery more difficult without structural fixes or new revenue sources.
Luvu Brands (LUVU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.13M
Dividend YieldN/A
Average Volume (3M)61.79K
Price to Earnings (P/E)―
Beta (1Y)-0.09
Revenue Growth2.37%
EPS Growth23.81%
CountryUS
Employees192
SectorConsumer Cyclical
Sector Strength84
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)-0.01
Shares Outstanding76,834,060
10 Day Avg. Volume175,295
30 Day Avg. Volume61,791
Financial Highlights & Ratios
PEG Ratio-0.80
Price to Book (P/B)1.71
Price to Sales (P/S)0.17
P/FCF Ratio-9.15
Enterprise Value/Market Cap4.88
Enterprise Value/Revenue0.42
Enterprise Value/Gross Profit1.62
Enterprise Value/Ebitda22.84
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Luvu Brands Business Overview & Revenue Model
Company DescriptionLuvu Brands, Inc. designs, manufactures, and markets various wellness, lifestyle, and casual seating products worldwide. The company offers Liberator, a brand category of products for enhancing sexual performance; and bed therapy products, assistive in relieving medical conditions associated with acid reflux, surgery recovery, and chronic pain under the Avana brand. It also provides daybeds, sofas, and beanbags made from virgin and re-purposed polyurethane foam under the Jaxx brand; and medical isolation gowns and face masks. In addition, the company is involved in the purchase and resale of products to retailers, e-commerce sites, and single retail stores, as well as provision of contract manufacturing and fulfillment services. It markets its products through various websites comprising liberator.com, jaxxliving.com, and avanacomfort.com, as well as through distributors, retailers, and e-tailers across various channels of adult, mass market, drug, and specialty accounts. The company was formerly known as Liberator, Inc. and changed its name to Luvu Brands, Inc. in November 2015. Luvu Brands, Inc. was incorporated in 1999 and is headquartered in Atlanta, Georgia.
How the Company Makes Moneynull
Luvu Brands Earnings Call Summary
Earnings Call Date:May 16, 2024
(Q3-2024)
| % Change Since: |
Next Earnings Date:May 18, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a period of significant challenges for Luvu Brands, with notable declines in overall sales and key product lines such as Liberator. However, there are positive developments in the Jaxx and Avana brands, gross margin improvements, and strategic initiatives for future growth, including international expansion and new brand introductions. Despite the current difficulties, the company is focused on returning to growth through innovation and market expansion.Q3-2024 Updates
Positive Updates
Jaxx Brand Growth
Jaxx product sales increased by 16% to $1.4 million in Q3 compared to $1.2 million in the same quarter of the prior year, showing steady progress with new e-commerce partners and categories.
Avana Product Sales Increase
Avana products saw a 5% increase in sales, reaching $686,000 in Q3 compared to $646,000 in the prior year.
Improved Gross Margin
Gross profit as a percentage of net sales increased to 28% from 26% in the prior year’s third quarter, attributed to improved raw material sourcing and reduced fulfillment costs.
International Expansion Plans
Active discussions with partners around the world are underway to increase the global footprint of Luvu Brands, with further announcements expected in the coming months.
New Brand Introduction
A new intimacy brand is planned for introduction later this year, aiming to access mass market distribution channels in drug and department stores, aligning with the emerging sexual wellness category.
Negative Updates
Overall Sales Decline
Net sales in Q3 decreased by 14% to $5.9 million compared to $6.9 million in the same quarter of the prior year, with a 18% decline for the 9 months ending March 31, 2024.
Liberator Brand Sales Drop
Sales of Liberator products decreased by 23% to $3.4 million in Q3, significantly impacting overall company performance.
Challenges in Retail Market
The decline in the retail market for pleasure products and increased competition from China-based knock-offs negatively affected sales.
EBITDA Decrease
Adjusted EBITDA for the 9 months ended March 31, 2024, was $448,000, down from $2,040,000 in the prior year, reflecting the sales decline and increased sales and marketing expenses.
Company Guidance
During the Luvu Brands Q3 2024 earnings call, the company reported a 14% decrease in net sales to $5.9 million for the quarter, and an 18% decrease to $18.8 million for the nine months ending March 31, 2024. The Liberator brand saw a significant 23% decline in sales, while Jaxx products experienced a 16% increase, and Avana products rose by 5%. Gross profit for the quarter was $1.6 million, down 7% from the previous year, with a gross margin increase from 26% to 28%. Adjusted EBITDA for the nine months was $448,000, reflecting an 18% sales decline and increased marketing expenses. Inventory was reduced by 17%, and working capital slightly decreased to $1.7 million. The company outlined strategies for growth, including product innovation, increased marketing efforts, and international expansion, aiming to return to top-line growth in the coming year.Luvu Brands Financial Statement Overview
Summary
Recent fundamentals are weak: TTM net margin is negative (~-5%) with slightly negative EBIT, and both operating cash flow (~-$0.4M) and free cash flow (~-$0.5M) are negative. Balance-sheet risk is elevated with very high debt-to-equity (~6.1x) and low equity, reducing financial flexibility despite decent gross margin (~26%) and positive EBITDA.Income Statement
TTM (Trailing-Twelve-Months) results show modest gross profitability (gross margin ~26%) but overall losses (net margin ~-5%) with EBIT slightly negative. Revenue is essentially flat versus the most recent annual period, but the multi-year trajectory has weakened from strong profitability in 2021–2023 to losses in 2024, 2025, and TTM—indicating margin pressure and reduced operating leverage. EBITDA remains positive in TTM, which helps, but profitability has not translated to bottom-line earnings recently.32
Negative
Balance Sheet
Leverage is the central concern: TTM debt-to-equity is very high (~6.1x) with relatively low equity (~$1.5M) against ~$9.35M of debt. This is a sharp deterioration from the last annual report (~1.6x debt-to-equity), signaling increased balance-sheet risk and reduced financial flexibility. Returns to shareholders are negative in TTM due to losses, and the elevated leverage heightens sensitivity to any further earnings or cash flow volatility.20
Very Negative
Cash Flow
TTM (Trailing-Twelve-Months) cash generation is weak: operating cash flow is negative (~-$0.4M) and free cash flow is also negative (~-$0.5M), reversing the positive cash generation seen in 2022–2024. While free cash flow is reported as more than net loss in TTM (helped by non-cash items/working capital), the business is still consuming cash, and the deterioration from prior years reduces the cushion to service higher leverage.24
Negative
| Breakdown | TTM | Sep 2025 | Sep 2024 | Jun 2023 | Sep 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.47M | 24.69M | 24.57M | 29.22M | 26.34M | 23.11M |
| Gross Profit | 6.43M | 6.47M | 6.53M | 7.19M | 6.00M | 6.30M |
| EBITDA | 455.00K | 359.00K | 586.00K | 2.24M | 1.55M | 2.36M |
| Net Income | -1.33M | -448.00K | -399.00K | 1.20M | 604.00K | 2.56M |
Balance Sheet | ||||||
| Total Assets | 11.14M | 8.76M | 9.13M | 10.61M | 10.38M | 10.25M |
| Cash, Cash Equivalents and Short-Term Investments | 1.09M | 735.00K | 1.03M | 1.04M | 859.00K | 977.00K |
| Total Debt | 9.35M | 3.81M | 4.17M | 4.87M | 5.20M | 5.56M |
| Total Liabilities | 9.60M | 6.34M | 6.30M | 7.40M | 8.43M | 8.92M |
| Stockholders Equity | 1.54M | 2.42M | 2.83M | 3.21M | 1.95M | 1.32M |
Cash Flow | ||||||
| Free Cash Flow | -494.00K | -451.00K | 404.00K | 546.00K | 335.00K | 330.00K |
| Operating Cash Flow | -407.00K | -410.00K | 475.00K | 661.00K | 387.00K | 540.00K |
| Investing Cash Flow | -87.00K | -41.00K | -71.00K | -115.00K | -52.00K | -210.00K |
| Financing Cash Flow | 233.00K | 158.00K | -417.00K | -364.00K | -453.00K | -505.00K |
Luvu Brands Technical Analysis
Negative
0.03
Price Trends
0.03
Negative
0.03
Negative
0.04
Negative
Market Momentum
>-0.01
Negative
50.74
Neutral
100.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LUVU, the sentiment is Negative. The current price of 0.03 is above the 20-day moving average (MA) of 0.03, below the 50-day MA of 0.03, and below the 200-day MA of 0.04, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 50.74 is Neutral, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LUVU.
Luvu Brands Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $243.97M | 7.91 | 12.37% | 1.77% | 6.00% | 64.58% | |
70 Outperform | $568.47M | 12.45 | 9.20% | 7.86% | -4.26% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $28.78M | 4.73 | -23.80% | 12.12% | -1.49% | -399.62% | |
50 Neutral | $35.47M | -1.43 | -39.99% | ― | -4.94% | 11.35% | |
43 Neutral | $2.13M | -0.76 | -14.98% | ― | 2.37% | 23.81% |
* Consumer Cyclical Sector Average
LUVU
Luvu Brands
0.03
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-52.63%
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ETD
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.