One-glance verdict
Within fair range
$18.40 our estimate vs market $13.91
Wall Street consensus: $23.17 (25.9% higher than our fair-value estimate)
24% below our estimate
Fundamentals snapshot
The Lovesac Company
LOVE · NGM · Consumer Cyclical · Furnishings, Fixtures & Appliances
Current price
$13.91
52-week range
$10.33 - $19.25
Market cap
$200.63M
Balance sheet
Watch
45.84x Strong cushion
Net debt $122.22M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 0.1% last year.
- Reward Returns 8.8% on equity, ahead of 80% of its peers.
- Risk Operating margin compressed from 5.7% to -5.6% over 3 years.
- Risk Insider ownership is only 5.5% (peer median: 13.1%).
What this company does
The Lovesac Company
The Lovesac Company sells unique, adaptable furniture, specializing in large foam beanbags called "Sacs" and modular couches called "Sactionals" that can be rearranged into different shapes. It makes most of its money by selling these patented, premium-priced items directly to customers through its website and showrooms. This direct sales approach is key because it helps the company keep higher profit margins (the portion of each sale that the company keeps as profit after costs).
How the company got here
The Lovesac Company started in 1995 when its founder, Shawn Nelson, built a giant eight-foot foam-filled beanbag chair in his parents' basement. After gaining popularity, the company officially launched and began selling these oversized chairs, called 'Sacs'. A key turning point was in 2006 when, after customers repeatedly asked to buy the sofas in their stores, the company introduced its modular couches called 'Sactionals'. This new product line, which allows for endless customization, became the company's main focus and primary source of revenue (the money a company receives from its sales). The company went through financial difficulties and restructuring but eventually became publicly traded on the Nasdaq stock exchange in 2018.
What it actually does
Lovesac is a furniture company that sells a unique type of adaptable furniture directly to customers. Instead of traditional sofas and chairs, they focus on two main product lines: 'Sactionals' and 'Sacs'. Sactionals are modular couches made of separate pieces ('seats' and 'sides') that you can arrange in almost any shape or size, like building blocks for furniture. Sacs are oversized beanbag-style chairs filled with a proprietary shredded foam blend, not traditional beans or beads. The company also sells accessories for these products, like drink holders, blankets, and integrated home theater sound systems.
Sactionals
This is the company's main business, making up the vast majority of its sales. Sactionals are highly customizable couches where customers buy individual 'seat' and 'side' pieces to build their own unique seating arrangement. A key feature is that the covers are removable and machine-washable, and customers can buy new covers to change the look of their furniture without replacing the whole thing. This part of the business also includes high-tech add-ons, like the StealthTech Sound + Charge system, which embeds Harman Kardon speakers and wireless charging directly into the Sactional pieces.
Sacs & Other
This segment includes the company's original product, the 'Sac,' which is a large, foam-filled chair often described as a high-end beanbag. These come in various sizes and have the same changeable and washable cover system as the Sactionals. This part of the business is a much smaller slice of the company's total revenue compared to Sactionals. The 'Other' category includes various accessories designed to complement the main products, such as special blankets, pillows, and tables that fit onto the Sactionals.
What management is betting on now
The company's main strategy is to continue expanding its Sactionals platform as the center of its business. They are focused on a 'Designed for Life' philosophy, emphasizing that their products are a long-term investment that can adapt and grow with a customer's life, rather than being disposable. Management is also working to make its supply chain (the entire process of making and selling goods, from sourcing raw materials to delivering the final product to customers) more efficient by bringing some manufacturing to the United States. Another key focus is increasing brand awareness and expanding their physical showroom footprint to allow more potential customers to experience the products in person before buying.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$-6.59M
FY2025 Q4
$38.74M
FY2026 Q1
$-49.95M
FY2026 Q2
$7.83M
FY2026 Q3
$-10.18M
FY2026 Q4
$78.50M
FY2027 Q1
$-40.39M
FY2027 Q2
$17.36M
Revenue
$161.25M
Net income
$7.43M
Diluted EPS
0.51
Operating cash flow
$23.93M
Free cash flow
$17.36M
Fetching…
Sources
Revenue
$138.20M
Net income
$-11.09M
Diluted EPS
-0.76
Operating cash flow
$-35.36M
Free cash flow
$-40.39M
Fetching…
Sources
Revenue
$248.05M
Net income
$32.11M
Diluted EPS
2.18
Operating cash flow
$83.42M
Free cash flow
$78.50M
Fetching…
Sources
Revenue
$150.17M
Net income
$-10.55M
Diluted EPS
-0.72
Operating cash flow
$-4.88M
Free cash flow
$-10.18M
Fetching…
Sources
Revenue
$160.53M
Net income
$-6.65M
Diluted EPS
-0.45
Operating cash flow
$12.16M
Free cash flow
$7.83M
Fetching…
Sources
Revenue
$138.37M
Net income
$-10.84M
Diluted EPS
-0.73
Operating cash flow
$-41.38M
Free cash flow
$-49.95M
Fetching…
Sources
Revenue
$241.49M
Net income
$35.31M
Diluted EPS
2.22
Operating cash flow
$44.02M
Free cash flow
$38.74M
Fetching…
Sources
Revenue
$149.91M
Net income
$-4.93M
Diluted EPS
-0.32
Operating cash flow
$-4.21M
Free cash flow
$-6.59M
Fetching…
Sources
Is it cheap or expensive?
Fair value $18.40 vs current price $13.91
Wall Street consensus is the average analyst price target: $23.17 (25.9% higher than our fair-value estimate).
Our most-likely fair value is $18.40 a share — about 32.3% away from today's price of $13.91, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $122.2M. Interest coverage 45.8x.
Net debt
$122.22M
Interest coverage
45.84x
The Lovesac Company's profit covers its interest bill about 45.8 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
LOVE
BASELINE
The Lovesac Company
Total debt $191.02M Interest coverage 45.84x This is the baseline the peer rows are being compared against.
Total debt $87.82M Interest coverage 160.10x +249% vs LOVE Carries about 3.5x more debt cushion than LOVE.
Total debt $230.71M Interest coverage 4.13x -91% vs LOVE Carries about 11.1x less debt cushion than LOVE.
Total debt $120.69M Interest coverage 203.19x +343% vs LOVE Carries about 4.4x more debt cushion than LOVE.
Total debt $23.95M Interest coverage -1.16x -100% vs LOVE This peer has almost no interest-payment cushion compared with LOVE.
Total debt $215.18M Interest coverage -1.10x -100% vs LOVE This peer has almost no interest-payment cushion compared with LOVE.
What you should know
The case for and against LOVE
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.1% last year.
-
Returns 8.8% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
-
Operating margin compressed from 5.7% to -5.6% over 3 years.
-
Insider ownership is only 5.5% (peer median: 13.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
11.40x
Forward P/E
6.07x
P/B
0.99x
P/S
0.29x
EV/EBITDA
18.65x
PEG ratio
0.43x
Profitability
How much profit each dollar creates
Gross margin
56.0%
Operating margin
-5.6%
Net margin
2.6%
ROE
8.8%
ROA
0.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.91x
Current ratio
1.47x
Quick ratio
0.53x
Total debt
$191.02M
Total cash
$68.80M
Growth
How the business has been compounding
Revenue TTM
$697.65M
Revenue 5Y CAGR
8.8%
EPS TTM
1.22
EPS 5Y CAGR
-45.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$67.11M
Free CF TTM
$26.19M
FCF margin
3.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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