The Lovesac Company Fundamental Analysis (NASDAQ: LOVE)
The Lovesac Company Fundamental Analysis (NASDAQ: LOVE)
The Lovesac Company (NASDAQ: LOVE) shows weak financial fundamentals with a PE ratio of 12.05, profit margin of 2.56%, and ROE of 8.69%. The company generates $0.7B in annual revenue with weak year-over-year growth of -2.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 30.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LOVE's fundamental strength across five key dimensions:
Efficiency Score
WeakLOVE struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLOVE trades at attractive valuation levels.
Growth Score
WeakLOVE faces weak or negative growth trends.
Financial Health Score
ExcellentLOVE maintains a strong and stable balance sheet.
Profitability Score
WeakLOVE struggles to sustain strong margins.
Key Financial Metrics
Is LOVE Expensive or Cheap?
P/E Ratio
LOVE trades at 12.05 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, LOVE's PEG of 0.24 indicates potential undervaluation.
Price to Book
The market values The Lovesac Company at 1.03 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.30 times EBITDA. This is generally considered low.
How Well Does LOVE Make Money?
Net Profit Margin
For every $100 in sales, The Lovesac Company keeps $2.56 as profit after all expenses.
Operating Margin
Core operations generate 3.25 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.69 in profit for every $100 of shareholder equity.
ROA
The Lovesac Company generates $3.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Lovesac Company generates limited operating cash flow of $67.05M, signaling weaker underlying cash strength.
Free Cash Flow
The Lovesac Company produces free cash flow of $44.65M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.05 in free cash annually.
FCF Yield
LOVE converts 20.67% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.05
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.31
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.91
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.47
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How LOVE Stacks Against Its Sector Peers
| Metric | LOVE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.05 | 24.17 | Better (Cheaper) |
| ROE | 8.69% | 977.00% | Weak |
| Net Margin | 2.56% | -3034.00% (disorted) | Weak |
| Debt/Equity | 0.91 | 0.59 | Weak (High Leverage) |
| Current Ratio | 1.47 | 2.32 | Neutral |
| ROA | 3.32% | 334.00% | Weak |
LOVE outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Lovesac Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
168.28%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
169.91%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
420.30%
Industry Style: Cyclical, Growth, Discretionary
High Growth