Luvu Brands (LUVU) AI Stock Analysis

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Luvu Brands

(OTC:LUVU)

54Neutral

Luvu Brands' overall stock score is primarily affected by its financial performance challenges, including declining revenue and high leverage. Technical analysis suggests some positive momentum, providing a moderate offset. However, the negative valuation metrics, such as a negative P/E ratio, remain significant concerns.

Luvu Brands (LUVU) vs. S&P 500 (SPY)

Market Cap

$3.03M

Dividend YieldN/A

Average Volume (3M)116.94K

Price to Earnings (P/E)―

Beta (1Y)-0.02

Revenue Growth-5.14%

EPS Growth-281.82%

CountryUS

Employees192

SectorConsumer Cyclical

Sector Strength63

IndustryFurnishings, Fixtures & Appliances

Share Statistics

EPS (TTM)>-0.01

Shares Outstanding76,834,060

10 Day Avg. Volume247,838

30 Day Avg. Volume116,935

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.17

Price to Cash Flow (P/CF)7.60

P/FCF Ratio4.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Luvu Brands Business Overview & Revenue Model

Company DescriptionLuvu Brands, Inc. is a manufacturer and marketer of a diverse range of consumer lifestyle products. The company operates primarily in the wellness, health, and lifestyle sectors, offering a variety of furniture, home goods, and intimate products. Luvu Brands is well-known for its Liberator brand, which focuses on products designed for comfort and enhancing personal experiences.

How the Company Makes MoneyLuvu Brands generates revenue through the sale of its diverse product lines across multiple brands, including Liberator, Jaxx, and Avana. The company sells its products directly to consumers through its e-commerce platforms and retail partnerships, as well as through wholesale distribution channels. Key revenue streams include online sales, retail partnerships, and wholesale distribution, with significant contributions coming from its innovative designs and strong brand recognition in the lifestyle and wellness markets. Luvu Brands also benefits from strategic partnerships and collaborations which enhance its market reach and product offerings.

Luvu Brands Financial Statement Overview

Summary

Luvu Brands is experiencing a decline in revenue and profitability, with a negative net income margin and a moderate gross profit margin. The high debt-to-equity ratio indicates significant leverage risk, and the declining free cash flow growth rate reflects operational challenges. Improvement in revenue growth and profitability is critical for future stability.

Income Statement

Negative

Luvu Brands has experienced a decline in revenue and profitability in recent periods, with the most recent TTM showing a negative net income margin of -1.30%. The gross profit margin remains moderate at 26.50%. The company has struggled to maintain revenue growth, evidenced by the significant drop from $29.22 million in 2023 to $24.60 million in TTM 2024, reflecting a negative growth trajectory.

Balance Sheet

Neutral

The company maintains a high debt-to-equity ratio of 1.37, indicating significant leverage, which poses potential financial risk. However, the equity ratio is 29.83%, suggesting a moderate capital structure. Overall, the balance sheet shows some stability but is weighed down by high leverage.

Cash Flow

Neutral

Luvu Brands has managed to maintain a positive free cash flow, but with a declining growth rate, as seen in the decrease from $546,000 in 2023 to $204,000 in TTM 2024. The operating cash flow to net income ratio is negative, reflecting operational challenges and profitability issues.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
26.34M	24.57M	29.22M	26.34M	23.11M	18.38M
	Gross Profit
5.92M	6.53M	7.19M	6.00M	6.30M	5.53M
	EBIT
947.00K	174.00K	1.54M	946.00K	1.84M	1.45M
	EBITDA
1.47M	586.00K	2.24M	1.55M	2.36M	1.60M
	Net Income Common Stockholders
604.00K	-399.00K	1.20M	262.00K	2.56M	270.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.35M	1.03M	1.04M	859.00K	977.00K	1.15M
	Total Assets
9.49M	9.13M	10.61M	10.38M	10.25M	5.45M
	Total Debt
3.88M	4.17M	4.87M	5.20M	5.56M	3.66M
	Net Debt
2.53M	3.15M	3.83M	4.34M	4.58M	2.51M
	Total Liabilities
6.66M	6.30M	7.40M	8.43M	8.92M	6.72M
	Stockholders Equity
2.83M	2.83M	3.21M	1.95M	1.32M	-1.27M
Cash Flow		Free Cash Flow
335.00K	404.00K	546.00K	335.00K	330.00K	140.00K
	Operating Cash Flow
387.00K	475.00K	661.00K	387.00K	540.00K	367.00K
	Investing Cash Flow
-52.00K	-71.00K	-115.00K	-52.00K	-210.00K	-227.00K
	Financing Cash Flow
-453.00K	-417.00K	-364.00K	-453.00K	-505.00K	363.00K

Luvu Brands Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.04

Price Trends

50DMA

0.05

Negative

100DMA

0.05

Negative

200DMA

0.06

Negative

Market Momentum

MACD

>-0.01

Positive

RSI

57.91

Neutral

STOCH

78.79

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LUVU, the sentiment is Negative. The current price of 0.04 is below the 20-day moving average (MA) of 0.05, below the 50-day MA of 0.05, and below the 200-day MA of 0.06, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 57.91 is Neutral, neither overbought nor oversold. The STOCH value of 78.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LUVU.

Luvu Brands Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	59 Neutral	$11.20B	10.09	-1.41%	3.96%	1.31%	-16.95%
LUVU	54 Neutral	$3.03M	―	-10.73%	―	-5.14%	-281.82%
FORD	41 Neutral	$7.49M	―	-99.06%	―	-10.21%	41.17%
NVFY	40 Underperform	$7.93M	―	-307.29%	―	-12.63%	61.30%
WW	39 Underperform	$41.70M	―	31.02%	―	-11.65%	-174.54%
IVP	35 Underperform	$3.60M	―	-3687.07%	―	-0.50%	94.60%
NWTG	30 Underperform	$552.76K	―	-3549.92%	―	840.00%	-29.73%

* Consumer Cyclical Sector Average

Performance Comparison

LUVU

Luvu Brands

0.04

-0.04

-50.00%

FORD

Forward Industries

6.80

1.03

17.85%

WW International

0.49

-1.34

-73.22%

NVFY

Nova Lifestyle

0.61

-2.22

-78.45%

NWTG

Newton Golf Company

2.82

-166.68

-98.34%

IVP

Inspire Veterinary Partners, Inc. Class A

1.58

-114.67

-98.64%

Luvu Brands Earnings Call Summary

Earnings Call Date: Feb 10, 2025 | % Change Since: -20.00% | Next Earnings Date: May 19, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a period of significant challenges for Luvu Brands, with notable declines in overall sales and key product lines such as Liberator. However, there are positive developments in the Jaxx and Avana brands, gross margin improvements, and strategic initiatives for future growth, including international expansion and new brand introductions. Despite the current difficulties, the company is focused on returning to growth through innovation and market expansion.

Highlights

Jaxx Brand Growth

Jaxx product sales increased by 16% to $1.4 million in Q3 compared to $1.2 million in the same quarter of the prior year, showing steady progress with new e-commerce partners and categories.

Avana Product Sales Increase

Avana products saw a 5% increase in sales, reaching $686,000 in Q3 compared to $646,000 in the prior year.

Improved Gross Margin

Gross profit as a percentage of net sales increased to 28% from 26% in the prior year’s third quarter, attributed to improved raw material sourcing and reduced fulfillment costs.

International Expansion Plans

Active discussions with partners around the world are underway to increase the global footprint of Luvu Brands, with further announcements expected in the coming months.

New Brand Introduction

A new intimacy brand is planned for introduction later this year, aiming to access mass market distribution channels in drug and department stores, aligning with the emerging sexual wellness category.

Lowlights

Overall Sales Decline

Net sales in Q3 decreased by 14% to $5.9 million compared to $6.9 million in the same quarter of the prior year, with a 18% decline for the 9 months ending March 31, 2024.

Liberator Brand Sales Drop

Sales of Liberator products decreased by 23% to $3.4 million in Q3, significantly impacting overall company performance.

Challenges in Retail Market

The decline in the retail market for pleasure products and increased competition from China-based knock-offs negatively affected sales.

EBITDA Decrease

Adjusted EBITDA for the 9 months ended March 31, 2024, was $448,000, down from $2,040,000 in the prior year, reflecting the sales decline and increased sales and marketing expenses.

Company Guidance

During the Luvu Brands Q3 2024 earnings call, the company reported a 14% decrease in net sales to $5.9 million for the quarter, and an 18% decrease to $18.8 million for the nine months ending March 31, 2024. The Liberator brand saw a significant 23% decline in sales, while Jaxx products experienced a 16% increase, and Avana products rose by 5%. Gross profit for the quarter was $1.6 million, down 7% from the previous year, with a gross margin increase from 26% to 28%. Adjusted EBITDA for the nine months was $448,000, reflecting an 18% sales decline and increased marketing expenses. Inventory was reduced by 17%, and working capital slightly decreased to $1.7 million. The company outlined strategies for growth, including product innovation, increased marketing efforts, and international expansion, aiming to return to top-line growth in the coming year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.