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Lovesac (NASDAQ:LOVE) Rolls Out Earnings, Stock Craters
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Lovesac (NASDAQ:LOVE) Rolls Out Earnings, Stock Craters

Story Highlights

Lovesac loses big after its earnings report disappoints, and its guidance does it no further favors.

Free LOVE Analysis

For fans of huge modular couches—and admittedly, that is kind of a niche market—Lovesac (NASDAQ:LOVE) rolled out its earnings report today. Which was, essentially, a catastrophe. The good news is that shares recovered a little as the day went on. The bad news is that, as of Thursday afternoon’s trading, they were still down over 13%.

The numbers fell well short of what analysts were looking for. Revenue came in at $250.5 million, and earnings came in at $1.87 per share. That sounds pretty good until you consider that analysts were looking for $265.4 million and $1.93 per share. That was bad enough, but then Lovesac offered up guidance. Management looks for $129 million in revenue for the first quarter of 2024 and $735 million for the full year. Analysts, again, expected more, looking for $149.6 million in the first quarter.

Is It Really That Bad?

Things actually managed to get worse from there, as a planned lawsuit is in the works led by Pomerantz LLP. Pomerantz is already seeking investors to determine if Lovesac or “…certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.” That’s bad news by itself. However, there’s one trend that might help Lovesac out in the future.

Not even a month ago, we took a look at a positive real estate outlook that was likely to help other companies like Wayfair (NASDAQ:W) gain. Home furnishings are on a general upswing, thanks to improvements in real estate, and Lovesac definitely qualifies in the home furnishings market. So, it too may be in line for benefit therein.

Is Lovesac Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on LOVE stock based on two Buys assigned in the past three months, as indicated by the graphic below. After a 26.99% loss in its share price over the past year, the average LOVE price target of $60 per share implies 194.26% upside potential.

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