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.
