Is The Lovesac Co. overvalued or undervalued?

As of 17 October 2025, The Lovesac Co. has moved from an attractive to a very expensive valuation grade. The company appears to be overvalued based on its current financial metrics. The P/E ratio stands at 25, while its peers, such as Ethan Allen Interiors, Inc. with a P/E of 28.41 and Arhaus, Inc. at 22.58, indicate that Lovesac's valuation is not justified relative to its competitors. Additionally, its EV to EBITDA ratio of 8.22 and Price to Book Value of 1.36 further support this assessment of overvaluation.
In comparison to the S&P 500, The Lovesac Co. has underperformed significantly over multiple periods, with a year-to-date return of -39.31% compared to the S&P 500's 13.30%, and a staggering 10-year return of -58.50% against the S&P 500's 227.77%. This stark contrast in performance reinforces the view that The Lovesac Co. is currently overvalued in the market.