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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Lovesac Company (XNAS:LOVE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LOVE
Name:
THE LOVESAC COMPANY (XNAS:LOVE)
Sector:
- 12662.37K
Industry:
Furnishings, Fixtures & Appliances
CEO:
Mr. Shawn Nelson
Total Employees:
607
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 838.07% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE LOVESAC COMPANY(LOVE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FURNISHINGS, FIXTURES & APPLIANCES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
29.62
One Month Price Target:
$30.01
Six Month Price Target :
$31.99
Likely Price in One Year's Time:
Ticker:
$34.36
Likely Trading Range Today Under (Normal Volatility)
$29.4
Price Upper limit ($) :
$30.01
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$26.01
This week:
$21.54
This month :
$13.46
Other Primary facts
Market Cap:
440.45M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
15.13M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
43.96%
-27.63%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$46.37
$38.57
$12.87
$20.67
Medium risk (<10%) entry points
Buy Call
Sell Call
$36.03
Buy Put:
Sell Put:
$34.36
$23.19
$24.88
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LOVE
Sharpe Ratio:
4.51%
Comparison:
LOVE, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 305.91% higher than the industry
& ratio is 98.01% higher than the market/S&P 500 average
Average Returns/Yield of
LOVE
Daily returns:
0.28%
Weekly returns:
1.42%
Monthly returns:
5.67%
Yearly returns:
14.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is 373.70% above industry average
Classification:
LOVE, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
LOVE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
6.08%
Weekly Volatility:
13.59%
Monthly Volatility:
27.19%
Yearly Volatility:
94.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.50%
Volatility in last five trading days has been -58.95% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-12.20%
Weekly VaR:
-27.29%
Monthly VaR:
-54.57%
How Much Can the price of
LOVE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-45%
Worst case (decline):
>85%
This translates to price declining to:
$16.29
This translates to price declining to:
$4.44
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LOVE is a 285.18% riskier investment compared to the market/S&P 500 & is 229.98% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 53.96% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LOVE
Beta in relation to market/S&P 500--2.38
Expected beta in 1 year's time:
1.336
Expected beta in 3 year's time:
1.889
Unlevered (debt free) Beta:
1.249
Beta in relation to Nasdaq (XNAS):
1.583
Beta in relation to all global stocks::
1.244
Beta Comparison & Analysis
Beta of competitors/peers::
2.038
Beta is 16.81% higher than peers
Average Industry Beta:
1.707
Beta is 39.46% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
30.66%
Sustainable growth rate is -8.36% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.485
Alpha is -9946.12% below industry average alpha yield
Alpha is 3089% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LOVE
Equity cost of capital:
0.195
Equity cost of capital is 31.09% above industry mean WACC
Unlevered (without debt) cost of capital:
10.21%
Before-tax cost of debt:
0.13%
After-tax cost of debt:
0.10%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.10%
WACC is 34.44% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$36.01
Revenue growth rate per share of (3Y):
4.05
Annual revenue growth rate is 264.47% above the industry average
EPS:
$2.83
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.16
-
-
Debt per share
$5.60
EBITDA per share
$3.10
Valuation Analysis Today of
LOVE
P/E Ratio:
10.47
P/E Ratio of Competitors/Peers:
10.46
P/E ratio is 0.09% higher than main peers & is -35.28% lower than the industry
Stock price/value with industry average P/E ratio: $45.77
LOVE is -35.28% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.82
Price to sales ratio is -10.26% below the industry mean
P/B (Price to book value ratio):
4.05
Price to free cash flow: 184.78
Price to free cash flow ratio is -15.74% lower than the industry
Net income growth rate (3Y):
-336.83%
Net income growth rate is 345.85% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
76.59%
Net debt to equity ratio:
30.11%
Debt to assets ratio:
32.71%
Net debt to assets ratio:
12.86%
Debt-to-asset ratio is -55.97% below industry average
Ability to repay debt:
Interest coverage ratio:
378.09
Interest coverage ratio is 316.79% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.437
Statistical significance of correlation:
LOVE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is -21.44% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.556
Correlation of price movement with Nasdaq (^IXIC):
-0.044
Covariance of price movement with the market:
-0.156
Kurtosis
7.415
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.036
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
LOVE
Gross Profit Margin Ratio:
215%
Operating Profit Margin Ratio:
7.13%
Operating profit margin is -3.62% lower than the industry
Net Profit Margin Ratio:
215%
Effective Tax Rate:
-18.30%
Effective tax rate is -199.14% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
41.32%
Return on equity (ROE) is 40.89% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
17.65%
Return on assets (ROA) is 96.94% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
2.2
Current ratio is 41.50% above industry average
Cash Conversion Cycle (days):
4.3
Cash conversion cycle is -92.38% below industry average
The remaining useful life of property plant & equipment is: 4.2 years
Stock based compensation to net income ratio:
1.43%
In-depth Efficiency Analysis
Revenue generated per employee:
897.4K
Each employee generates 105% more revenue than industry average revenue per employee
EBITDA generated per employee:
77.2K
Each employee generates 104% more EBITDA than industry average revenue per employee
Profit generated per employee:
75.3K
Each employee generates 258% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 20.9K
Each employee generates 58% more free cash flow than industry average revenue per employee
Assets/Capital per employee
196.0K
Each employee generates 58% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LOVE
TRAVELCENTERS OF AMERICA INC. (XNAS:TANNI)
DENNY'S CORPORATION (XNAS:DENN)
GOLDEN NUGGET ONLINE GAMING, INC.. (XNAS:GNOG)
CITI TRENDS, INC. (XNAS:CTRN)
ZUMIEZ INC. (XNAS:ZUMZ)
THE CHILDREN'S PLACE, INC. (XNAS:PLCE)
Golden Entertainment, Inc. (XNAS:GDEN)
ONESPAWORLD HOLDINGS Ltd (XNAS:OSW)
WORKHORSE GROUP INC. (XNAS:WKHS)
Current Analyst Ratings
Strong buy�0%
Buy�8%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
5/1/22
Revenue:
544.70M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
251.33M
293.38M
-
131.25M
201.55M
70.30M
5.44M
206.99M
-
124.00K
8.10M
46.88M
38.83M
45.73M
38.66M
- 7075.79K
45.73M
Statement of Cash Flow
Date:
Period:
2.42M
Differed Income Tax :
-
Stock Based Compensation :
654.47K
Change in Working Capital :
- 18308.08K
Accounts Receivables:
- 2382.22K
Other Working Capital:
- 1549.40K
Other Non-Cash Items:
3.57M
Net Cash Provided by Operating Activities:
- 9604.40K
Investments in PP&E:
- 2919.12K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
65.74M
-
65.74M
6.90M
55.96M
11.61M
140.20M
117.58M
143.56K
1.19M
-
-
68.00K
118.98M
-
259.18M
17.75M
14.29M
1.79M
7.84M
23.85M
63.73M
84.77M
-
84.77M
-
148.50M
0.15K
- 61375.15K
-
172.06M
April 30, 2021 at 6:00:00 AM
442.60M
110.68M
259.18M
-
99.06M
33.3M
-
- 138.86K
- 3057.98K
-
-
-
-
61.67K
61.67K
-
- 12600.70K
65.74M
78.34M
- 9604.40K
- 3057.98K
- 12662.37K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
LOVE
2023
2024
2025
2026
2027
$36.28
$42.08
$48.82
$56.63
$65.69