The Lovesac (NASDAQ:LOVE) Share Price Is Up 37% And Shareholders Are Holding On
If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the The Lovesac Company (NASDAQ:LOVE) share price is 37% higher than it was a year ago, much better than the market return of around 7.6% (not including dividends) in the same period. That's a solid performance by our standards! Lovesac hasn't been listed for long, so it's still not clear if it is a long term winner.
Check out our latest analysis for Lovesac
Because Lovesac made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Lovesac saw its revenue grow by 37%. That's a fairly respectable growth rate. While the share price performed well, gaining 37% over twelve months, you could argue the revenue growth warranted it. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Lovesac in this interactive graph of future profit estimates.
A Different Perspective
Lovesac boasts a total shareholder return of 37% for the last year. And the share price momentum remains respectable, with a gain of 147% in the last three months. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for Lovesac that you should be aware of.
Lovesac is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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