Lovesac Story

LOVE -  USA Stock  

USD 72.12  3.22  4.27%

It looks as if Lovesac may not recover as fast as we have hopped for as its price went down 5.26% today. The company current daily volatility is 4.83 percent, with a beta of 1.7 and an alpha of 0.4 over DOW. While some baby boomers are getting worried growing market volatility, it is reasonable to digest The Lovesac based on its historical price movement. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over three weeks ago
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Is Lovesac (NASDAQ:LOVE) way too risky for millennials?
The Lovesac currently holds roughly 47.69 M in cash with 32.18 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.25. The current year Debt to Equity Ratio is expected to grow to 2.09. The current year Average Equity is expected to grow to about 15.7 MThis firm has a current ratio of 2.04, suggesting that it is liquid enough and is able to pay its financial obligations when due.
Investing in Lovesac, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Lovesac along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Lovesac's stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Lovesac in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Lovesac. Your research has to be compared to or analyzed against Lovesac's peers to derive any actionable benefits. When done correctly, Lovesac's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Lovesac.

How important is Lovesac's Liquidity

Lovesac financial leverage refers to using borrowed capital as a funding source to finance The Lovesac ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Lovesac financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Lovesac's total debt and its cash.

How Lovesac utilizes its cash?

To perform a cash flow analysis of Lovesac, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Lovesac is receiving and how much cash it distributes out in a given period. The Lovesac cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Lovesac Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 40.52 Million

Lovesac Correlation with Peers

Investors in Lovesac can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in The Lovesac. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Lovesac and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Lovesac is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of Lovesac for more details

Another angle On Lovesac

Lovesac appears to be very steady, given 1 month investment horizon. Lovesac has Sharpe Ratio of 0.0924, which conveys that the firm had 0.0924% of return per unit of risk over the last month. Our standpoint towards estimating the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Lovesac, which you can use to evaluate future volatility of the firm. Please exercise The Lovesac Market Risk Adjusted Performance of 0.3647, downside deviation of 4.74, and Risk Adjusted Performance of 0.1129 to check out if our risk estimates are consistent with your expectations.
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Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Does Lovesac have cash to continue?

The expected short fall is down to -3.69 as of today.
As of the 14th of April 2021, Lovesac secures the Market Risk Adjusted Performance of 0.3647, downside deviation of 4.74, and Risk Adjusted Performance of 0.1129. In connection with fundamental indicators, the technical analysis model lets you check existing technical drivers of Lovesac, as well as the relationship between them. Strictly speaking, you can use this information to find out if the firm will indeed mirror its model of past prices, or the prices will eventually revert. We were able to interpolate and analyze data for nineteen technical drivers for Lovesac, which can be compared to its peers in the industry. Please verify Lovesac variance, as well as the relationship between the value at risk and skewness to decide if The Lovesac is priced some-what accurately, providing market reflects its recent price of 62.28 per share. Given that Lovesac has jensen alpha of 0.4038, we recommend you to check Lovesac's last-minute market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Lovesac

Although other companies in the furnishings, fixtures & appliances industry are either recovering or due for a correction, Lovesac may not be as strong as the others in terms of longer-term growth potentials. With a somewhat neutral outlook on your 30 days horizon, it may be better to hold off any trading activity and neither trade new shares of Lovesac nor drop your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Lovesac.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of The Lovesac. Please refer to our Terms of Use for any information regarding our disclosure principles.

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