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Should Lovesac (NASDAQ:LOVE) Be Disappointed With Their 24% Profit?

Simply Wall St

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It might be of some concern to shareholders to see the The Lovesac Company (NASDAQ:LOVE) share price down 18% in the last month. But that doesn't change the reality that over twelve months the stock has done really well. After all, the share price is up a market-beating 24% in that time.

See our latest analysis for Lovesac

Because Lovesac is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Lovesac grew its revenue by 62% last year. That's a head and shoulders above most loss-making companies. The solid 24% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Lovesac in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.

NasdaqGM:LOVE Income Statement, June 26th 2019

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Lovesac shareholders should be happy with the total gain of 24% over the last twelve months. And the share price momentum remains respectable, with a gain of 5.7% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

Of course Lovesac may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.