D.A. Davidson analyst Michael Baker has reiterated their bullish stance on LOVE stock, giving a Buy rating yesterday.
Michael Baker has given his Buy rating due to a combination of factors that highlight The Lovesac Company’s strategic positioning and potential for growth. One key reason is the company’s successful reduction in its reliance on China for production, decreasing its exposure from 46% two years ago to just 13% now. This diversification, particularly towards Vietnam, has lessened the impact of tariffs, which had previously been a significant concern.
Additionally, Lovesac has demonstrated resilience and adaptability through its proactive mitigation strategies, such as early inventory procurement and potential price adjustments, which have helped cushion the impact of increased tariffs. The company’s recent product launches, like the recliner and the EverCouch, have shown promising results, with strong sales and high repeat customer rates. These factors, combined with the potential for a housing market recovery, position Lovesac as a compelling small-cap value investment.
Baker covers the Consumer Cyclical sector, focusing on stocks such as Costco, AutoZone, and Citi Trends. According to TipRanks, Baker has an average return of 1.3% and a 51.06% success rate on recommended stocks.