Lovesac stock has more than tripled in the past 12 months
The shares of Lovesac Co (NASDAQ:LOVE) are up 0.8% to trade at $84.71 last check, after the furniture name yesterday announced changes to its leadership team. Mary Fox, one of the company's board directors, was appointed as its president and chief operating officer. Jack Krause, who now serves in those roles, will become its chief strategy officer, with both appointments set to go into effect Nov. 15. In addition, Fox will step down as a board director to make room for Krause.
Lovesac stock has been charging higher since bouncing off the $50 level in September. The 20-day moving average has contained multiple pullbacks during the equity's climb, with shares now standing not too far from their June 3, all-time high of $95.51. Longer term, LOVE sports an impressive 211.2% year-over-year lead.
The equity looks ripe for a shorts squeeze, too. Short interest rose 9.3% over the last two reporting periods, and the 2.50 million shares sold short now make up a whopping 17.8% of the stock's available float, or over one week's worth of pent-up buying power.
It's also worth noting now looks like a great opportunity to bet on LOVE's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 69% sits higher than just 13% of readings from the past 12 months. Simply put, options traders are pricing in relatively low volatility expectations at the moment.
Moreover, LOVE has maintained strong top- and bottom-line growth over the past few years. Its trailing 12-month revenues are up 21.5% in comparison to its 2020, and have increased a whopping 283% since 2017. In addition, net income grew 136% over the past 12 months.
Lovesac stock continues to be an attractive growth play, even at a high price-earnings ratio of 39.09. LOVE is expected to see a drastic decrease in earnings over the coming year, with analysts placing a forward price-earnings ratio of 58.82 on the equity. Still, the company has continuously beat earnings expectations by big margins. If it can keep up this trend, Lovesac stock could easily topple its previous record.
Conversely, if the furniture name begins to report lower margins on its earnings beats, or an earnings miss, it may see a huge selloff. This would represent a major opportunity for long-term investors looking for a high growth stock with a strong record.