The Lovesac Company's (NASDAQ:LOVE): The Lovesac Company designs, manufactures, and sells foam filled furniture, sectional couches, and related accessories. With the latest financial year loss of -US$34.5m and a trailing-twelve month of -US$12.2m, the US$97m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is LOVE’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for LOVE.
According to the 5 industry analysts covering LOVE, the consensus is breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$12m in 2023. LOVE is therefore projected to breakeven around 3 years from now. In order to meet this breakeven date, I calculated the rate at which LOVE must grow year-on-year. It turns out an average annual growth rate of 63% is expected, which is rather optimistic! If this rate turns out to be too aggressive, LOVE may become profitable much later than analysts predict.
Underlying developments driving LOVE’s growth isn’t the focus of this broad overview, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. LOVE currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. LOVE currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of LOVE to cover in one brief article, but the key fundamentals for the company can all be found in one place – LOVE’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further research:
- Valuation: What is LOVE worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether LOVE is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lovesac’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.