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Lovesac stock prediction as shares rocket 21% on solid FQ3 beat

By:
on Dec 8, 2021
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  • Lovesac shares on Wednesday skyrocketed more than 21%.
  • The company announced its FQ3 results before markets opened.
  • Lovesac beat analyst expectations on revenue and earnings.

On Wednesday, Lovesac Co (NASDAQ:LOVE) shares rocketed more than 21% after reporting its most recent quarterly results. The company announced its fiscal third-quarter revenue and earnings before markets opened, beating the consensus for analyst expectations.

Lovesac posted FQ3 GAAP earnings per share of $0.17 per share outperforming the consensus for Street expectations of -$0.43. On the other hand, its quarterly revenue increased by more than 56% from the same quarter last year to $116.67 million, surpassing expectations by $4.47 million. 

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The stock is now up nearly 94% this year and over 131% over the last 12 months.

Is there time left to buy?

From an investment perspective, Lovesac shares trade at reasonable trailing 12-month and forward P/E ratios of 31.75 and 38.63, respectively, making the stock an interesting option for value investors.

In addition, analysts expect the American furniture retailer to report earnings growth of more than 190% this year and average annual growth of 30% over the next five years.

Therefore, the stock could also be a compelling option for long-term growth investors.

Source – TradingView

Technically, Lovesac shares seem to have recently spiked to complete an upward breakout from a descending channel formation. As a result, the stock has since recovered from oversold conditions to surge closer to the overbought levels of the 14-day RSI.

Therefore, investors could target extended gains at about $85.23, or higher at $92.08, while $72.09 and $63.75 are crucial support zones.

In summary, although Lovesac shares have rallied significantly this year, its forecast earnings growth offers more upside potential.