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Lovesac: Long-Term Execution Is Key

Feb. 18, 2023 11:17 PM ETThe Lovesac Company (LOVE)8 Comments
Geoffrey Seiler profile picture
Geoffrey Seiler


  • Distribution increases and product innovation should power results.
  • Lovesac stock doesn't look expensive given its growth profile.
  • FY24 could be a challenge, but long term looks solid.

Sponsors & Venues - February 2022 - New York Fashion Week: The Shows

Arturo Holmes

While FY24 could be challenging against a difficult macro backdrop, Lovesac (NASDAQ:LOVE) looks poised to benefit from continued increases in distribution touchpoints as well as product innovation. Given its growth potential, the stock looks attractively priced for long-term

This article was written by

Geoffrey Seiler profile picture
Former Senior Equity Analyst at $600M long-short hedge fund Raging Capital.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (8)

is it a buy here in the low 20s?
cruiser88 profile picture
@earlgreytea definitely maybe.
cruiser88 profile picture
why add 7x rent to the EV/EBITDA? Their cost of rent, is it not already factored into their earnings? Why double account for this cost to manipulate a fake multiple value?
Alex JB profile picture
Nice write up. I'm less concerned about copycat, they've been around for quite a while in various forms. They've seen good growth in a declining market, I suspect as a result of the marketing spend and brand awareness. These guys are also about quality and sustainability, which resonates with their target market. Whilst discretionary spend is under pressure I'm not sure their market is feeling the pinch that bad...yet. With energy prices well off their highs we should see more money in the pocket in H2 assuming the Fed eases up. Very innovative products with some developing partnerships, e.g. Disney. Q4 is also cash generative for them so looking forward to the next set of results. Biggest concern is profitability. Taking out some of the growth spend I'd think they could hit 8-12% comfortably.
$400 for a beanbag chair…. I had a buddy selling the same stuff out of the back of a truck back in the 70’s for a few greenbacks and weed. Nothing new here. Will go the way of Peleton. Put your cash in a money market account if you can’t find a better idea than this.
@rocketjs Its the sectional couches not the bean bags that is driving growth. That said at the end of the day its a furniture company. It will only scale up so much.
@rocketjs Love is making a profit in a very difficult time of the economy which bolds well, Peleton has yet to turn a profit even when they should of when everyone was jailed at home during the great lie if they can not turn a profit in that environment very poor ran company, the two companies are nothing alike
I really like this company and have bought a few shares every couple months the last year and a half or so. Will stop once I hit 100 and keep my eye on it in case they keep on their nice track or if it dips again under $20 may go a little harder. Thanks for the write up!
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