Earnings Update: The Lovesac Company (NASDAQ:LOVE) Just Reported And Analysts Are Boosting Their Estimates
The Lovesac Company (NASDAQ:LOVE) investors will be delighted, with the company turning in some strong numbers with its latest results. Sales crushed expectations at US$62m, beating expectations by 35%. Lovesac reported a statutory loss of US$0.08 per share, which - although not amazing - was much smaller than the analysts predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Lovesac
Taking into account the latest results, the consensus forecast from Lovesac's seven analysts is for revenues of US$291.0m in 2021, which would reflect a meaningful 12% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to US$0.77 per share. Before this earnings announcement, the analysts had been modelling revenues of US$275.6m and losses of US$0.87 per share in 2021. So it seems there's been a definite increase in optimism about Lovesac's future following the latest consensus numbers, with a the loss per share forecasts in particular.
The consensus price target rose 7.4% to US$34.63, with the analysts encouraged by the higher revenue and lower forecast losses for next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Lovesac at US$43.00 per share, while the most bearish prices it at US$26.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Lovesac's revenue growth is expected to slow, with forecast 12% increase next year well below the historical 38%p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% next year. Even after the forecast slowdown in growth, it seems obvious that Lovesac is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Lovesac. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Lovesac going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Lovesac that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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