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 is currently overvalued, as indicated by its P/E ratio of 25, which is significantly higher than its peers like Ethan Allen Interiors, Inc. with a P/E of 28.41 and Arhaus, Inc. at 22.58. Additionally, the EV to EBITDA ratio stands at 8.22, which is lower than the industry average, suggesting a disconnect between valuation and earnings potential.
In comparison to its peers, The Lovesac Co. exhibits a relatively low ROCE of 8.79% and ROE of 5.34%, further emphasizing its overvaluation status. While specific return data is not available, the absence of strong returns relative to the S&P 500 reinforces the notion that the stock may not be a favorable investment at its current price of 14.36.