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Investing.com - DA Davidson has reiterated its Buy rating and $24.00 price target on The Lovesac Co. (NASDAQ:LOVE) ahead of the company’s second-quarter fiscal 2025 earnings report. According to InvestingPro data, analyst targets range from $24 to $38, with the stock currently trading at $19.30, suggesting potential upside. The company’s overall financial health score stands at "FAIR."
The furniture retailer is scheduled to release its quarterly results before the market opens on Thursday, with analysts expecting performance to be relatively in line with expectations. The company has maintained profitability over the last twelve months, with a healthy gross margin of 58.3% and a current ratio of 1.6x indicating strong liquidity.
DA Davidson indicated that while quarterly results are important, investor focus will likely center on updates regarding Lovesac’s new product launches, which could drive future growth.
The research firm emphasized that guidance will be a significant catalyst for the stock, particularly whether Lovesac can reiterate its plan for accelerated sales and profit growth in the second half of the fiscal year.
Looking beyond the immediate quarter, DA Davidson expressed optimism about Lovesac’s longer-term revenue prospects, noting that growth could accelerate over the next few years, supported by new product introductions and leverage from the company’s past investments.
In other recent news, The Lovesac Company reported fiscal first-quarter earnings that surpassed expectations, with revenue approximately 1% above consensus and adjusted EBITDA aligning with the upper end of the guidance range. The company’s sales reached the midpoint of its plan, featuring the first positive comparable sales in over a year, and EBITDA hit the high end of projections. Lovesac also announced a settlement agreement in a shareholder derivative lawsuit related to financial restatements and alleged internal control weaknesses, pending court approval. Furthermore, Lovesac appointed Alan Boehme, a seasoned technology executive with experience at H&M, Procter & Gamble, and Coca-Cola, to its Board of Directors.
DA Davidson maintained its Buy rating and $24 price target for Lovesac, citing expectations of a sales growth rebound supported by new product innovation and potential margin expansion. Canaccord also reiterated its Buy rating, noting market share gains as the company returned to growth after two consecutive quarters of declines. Lovesac’s showroom net sales accelerated to an 18% year-over-year growth rate, marking the highest growth for this channel since the third quarter of fiscal 2024. The company recently launched its EverCouch product line, receiving positive initial feedback and planning to expand its presence to approximately 100 showrooms later this summer.
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