Canaccord Genuity Reiterates Buy Rating on The Lovesac Co. (LOVE)

Canaccord Genuity analyst Maria Ripps reiterated a Buy rating and $30.00 price target on The Lovesac Co. (NASDAQ: LOVE).

The analyst commented: "Lovesac reported constructive fiscal Q2 results, with revenue broadly in line with expectations and growth positive for the second consecutive quarter, while profitability was solidly above the upper end of the guidance range. Management highlighted a slight category improvement, with overall furniture spend down ~4% and the strongest performance in July, although the company is maintaining its expectation for a 5% category decline in FY26. Strategically, Lovesac continued to make progress, having soft launched Snugg by Lovesac (f/k/a EverCouch) during the quarter and implemented a more intuitive and user-friendly website design that is translating to improved engagement and conversion. The forward outlook was mixed, with the Q3 revenue outlook broadly in line with expectations while FY26 revenue guidance was narrowed but maintained at the midpoint. FY26 adj. EBITDA guidance, however, was lowered as tariffs and competitive discounting pressures are expected to compress GM more than previously estimated. That said, the company believes it should return to high 50s GM over time, and it is actively addressing the aforementioned headwinds by (1) working with vendors on concessions, (2) selectively raising prices, and (3) continuing to diversify manufacturing away from China, with the company on track to exit the country in the near future. LOVE shares are under pressure on the print, and continued consistent revenue growth along with GM stabilization is likely required for a sustained stock rally. That said, we believe the current valuation at just 0.4x forward revenue and ~5x adj. EBITDA already more than reflects near-term macro headwinds and discounts the long-term growth prospects of the business."

For an analyst ratings summary and ratings history on The Lovesac Co. click here. For more ratings news on The Lovesac Co. click here.

Shares of The Lovesac Co. closed at $17.67 yesterday.

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