Analysts Urge Selling Lovesac at $17.60 as 10.3x EV/EBITDA Prices In 35% Rally

1 articles · Updated · Yahoo Finance · Aug 14

$17.60 Lovesac shares now look fully valued to the analyst team, which recommends selling after the stock climbed 35.1% in six months and beat the S&P 500 by 21.6%.
14.8% annual revenue growth over the past five years was deemed too weak for a consumer discretionary company, while free cash flow margin averaged just 1.3% over the last two years.
Declining return on invested capital added to the bearish view, suggesting newer investments are generating weaker returns and limiting profitable growth opportunities.
At 10.3x forward EV-to-EBITDA, the team argues much of the good news is already priced in and says investors can find better opportunities elsewhere.