Is The Lovesac Co. overvalued or undervalued?

As of 31 July 2025, The Lovesac Co. has moved from a very expensive to a fair valuation grade. Based on the current metrics, the company appears to be fairly valued. Key ratios include a P/E ratio of 25, an EV to EBITDA of 8.22, and a Price to Book Value of 1.36. In comparison, Ethan Allen Interiors, Inc. has a P/E of 28.41, while Arhaus, Inc. shows a P/E of 22.58, indicating that The Lovesac Co. is positioned competitively within its peer group.
Despite the fair valuation, The Lovesac Co. has underperformed against the S&P 500, with a one-year return of -30.15% compared to the index's 17.14%. This trend continues over longer periods, with a three-year return of -27.28% versus the S&P's 70.41%, suggesting that while the stock may be fairly valued, its performance has not met investor expectations.