ASX:LOV

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Lovisa Holdings Limited engages in the retail sale of fashion jewelry and accessories. More Details


Snowflake Analysis

Exceptional growth potential with adequate balance sheet.

Share Price & News

How has Lovisa Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LOV is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: LOV's weekly volatility has decreased from 17% to 10% over the past year.


Market Performance


7 Day Return

-6.0%

LOV

-0.05%

AU Specialty Retail

0.3%

AU Market


1 Year Return

56.6%

LOV

44.1%

AU Specialty Retail

12.5%

AU Market

Return vs Industry: LOV exceeded the Australian Specialty Retail industry which returned 44.1% over the past year.

Return vs Market: LOV exceeded the Australian Market which returned 12.5% over the past year.


Shareholder returns

LOVIndustryMarket
7 Day-6.0%-0.05%0.3%
30 Day32.4%0.9%2.2%
90 Day31.4%7.7%4.0%
1 Year59.6%56.6%50.1%44.1%16.1%12.5%
3 Year72.1%59.2%85.5%62.6%31.1%15.1%
5 Year599.2%497.9%101.7%60.3%62.5%31.3%

Long-Term Price Volatility Vs. Market

How volatile is Lovisa Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lovisa Holdings undervalued compared to its fair value and its price relative to the market?

16.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LOV (A$14.41) is trading below our estimate of fair value (A$17.2)

Significantly Below Fair Value: LOV is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: LOV is poor value based on its PE Ratio (376.4x) compared to the AU Specialty Retail industry average (15x).

PE vs Market: LOV is poor value based on its PE Ratio (376.4x) compared to the Australian market (20x).


Price to Earnings Growth Ratio

PEG Ratio: LOV is poor value based on its PEG Ratio (10.4x)


Price to Book Ratio

PB vs Industry: LOV is overvalued based on its PB Ratio (26.1x) compared to the AU Specialty Retail industry average (3x).


Next Steps

Future Growth

How is Lovisa Holdings forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

36.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LOV's forecast earnings growth (36.3% per year) is above the savings rate (2%).

Earnings vs Market: LOV's earnings (36.3% per year) are forecast to grow faster than the Australian market (15.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LOV's revenue (23.5% per year) is forecast to grow faster than the Australian market (5.6% per year).

High Growth Revenue: LOV's revenue (23.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LOV's Return on Equity is forecast to be very high in 3 years time (68.4%).


Next Steps

Past Performance

How has Lovisa Holdings performed over the past 5 years?

-0.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LOV has a large one-off gain of A$4.2M impacting its December 27 2020 financial results.

Growing Profit Margin: LOV's current net profit margins (1.8%) are lower than last year (13.7%).


Past Earnings Growth Analysis

Earnings Trend: LOV's earnings have declined by 0.8% per year over the past 5 years.

Accelerating Growth: LOV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LOV had negative earnings growth (-89.3%) over the past year, making it difficult to compare to the Specialty Retail industry average (35.5%).


Return on Equity

High ROE: LOV's Return on Equity (6.9%) is considered low.


Next Steps

Financial Health

How is Lovisa Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: LOV's short term assets (A$75.0M) do not cover its short term liabilities (A$86.6M).

Long Term Liabilities: LOV's short term assets (A$75.0M) do not cover its long term liabilities (A$127.0M).


Debt to Equity History and Analysis

Debt Level: LOV is debt free.

Reducing Debt: LOV has no debt compared to 5 years ago when its debt to equity ratio was 80.7%.

Debt Coverage: LOV has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: LOV has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Lovisa Holdings's current dividend yield, its reliability and sustainability?

2.78%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: LOV's dividend (2.78%) is higher than the bottom 25% of dividend payers in the Australian market (2.09%).

High Dividend: LOV's dividend (2.78%) is low compared to the top 25% of dividend payers in the Australian market (5.52%).


Stability and Growth of Payments

Stable Dividend: LOV has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: LOV's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (522.4%), LOV's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LOV's dividends in 3 years are forecast to be covered by earnings (73.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average board tenure


CEO

Shane Fallscheer

no data

Tenure

AU$1,222,433

Compensation

Mr. Shane Roland Fallscheer is the Managing Director and founder of Lovisa Holdings Limited. Mr. Fallscheer serves as Chief Executive Officer of Lovisa Pty Ltd. He served as the Chief Executive Officer of ...


CEO Compensation Analysis

Compensation vs Market: Shane's total compensation ($USD943.09K) is below average for companies of similar size in the Australian market ($USD1.41M).

Compensation vs Earnings: Shane's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Shane Fallscheer
MD & Executive Directorno dataAU$1.22m2.08%
A$ 33.4m
Brett Blundy
Non-Executive Chairman2.33yrsAU$150.00k40.21%
A$ 644.2m
James King
Independent Non-Executive Director4.83yrsAU$80.00k0.032%
A$ 506.9k
Sei Alt
Independent Non-Executive Director2.08yrsAU$63.33kno data
Tracey Blundy
Non-Executive Director6.33yrsAU$80.00k1.07%
A$ 17.2m
Nico van der Merwe
Alternate Director2.08yrsno datano data
John Charlton
Independent Non-Executive Director0.58yrno data0.0046%
A$ 74.5k

2.3yrs

Average Tenure

60yo

Average Age

Experienced Board: LOV's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: LOV insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Lovisa Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lovisa Holdings Limited
  • Ticker: LOV
  • Exchange: ASX
  • Founded: 2010
  • Industry: Specialty Stores
  • Sector: Retail
  • Market Cap: AU$1.602b
  • Shares outstanding: 107.46m
  • Website: https://www.lovisa.com

Number of Employees


Location

  • Lovisa Holdings Limited
  • 818 Glenferrie Road
  • Level 1
  • Hawthorn
  • Victoria
  • 3122
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LOVASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 2014
LOVCHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 2014
LO7DB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2014

Biography

Lovisa Holdings Limited engages in the retail sale of fashion jewelry and accessories. It designs, develops, sources, and merchandises fashion jewelry and accessories under the Lovisa brand name. As of Jun...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/04 07:07
End of Day Share Price2021/03/04 00:00
Earnings2020/12/27
Annual Earnings2020/06/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.