ASX:LOV

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Flawless balance sheet with reasonable growth potential.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

11.0%

LOV

-0.9%

AU Specialty Retail

0.4%

AU Market


1 Year Return

48.0%

LOV

23.1%

AU Specialty Retail

9.8%

AU Market

Return vs Industry: LOV exceeded the Australian Specialty Retail industry which returned 23.1% over the past year.

Return vs Market: LOV exceeded the Australian Market which returned 9.8% over the past year.


Shareholder returns

LOVIndustryMarket
7 Day11.0%-0.9%0.4%
30 Day8.8%2.4%-1.1%
90 Day17.6%16.9%-0.6%
1 Year52.6%48.0%28.7%23.1%16.1%9.8%
3 Year361.1%316.2%19.9%4.5%36.1%17.9%
5 Yearn/a83.7%49.7%49.4%15.7%

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?

39.61x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: LOV (A$13.9) is trading above our estimate of fair value (A$13.79)

Significantly Undervalued: LOV is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LOV is poor value based on its PE Ratio (39.6x) compared to the Specialty Retail industry average (15.6x).

PE vs Market: LOV is poor value based on its PE Ratio (39.6x) compared to the Australian market (18.2x).


Price to Earnings Growth Ratio

Low PEG Ratio: LOV is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: LOV is overvalued based on its PB Ratio (27.4x) compared to the AU Specialty Retail industry average (2.2x).


Next Steps

Future Growth

How is Lovisa Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

19.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LOV's forecast earnings growth (19.6% per year) is above the savings rate (2.3%).

Earnings vs Market: LOV's earnings (19.6% per year) are forecast to grow faster than the Australian market (10.3% per year).

High Growth Earnings: LOV's earnings are forecast to grow, but not significantly.

Revenue vs Market: LOV's revenue (17.9% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: LOV's revenue (17.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: LOV's Return on Equity is forecast to be very high in 3 years time (75.6%).


Next Steps

Past Performance

How has Lovisa Holdings performed over the past 5 years?

20.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: LOV's earnings have grown significantly by 20.4% per year over the past 5 years.

Accelerating Growth: LOV's earnings growth over the past year (3.1%) is below its 5-year average (20.4% per year).

Earnings vs Industry: LOV earnings growth over the past year (3.1%) exceeded the Specialty Retail industry -2.1%.


Return on Equity

High ROE: LOV's Return on Equity (69%) is considered outstanding.


Return on Assets

ROA vs Industry: LOV has a higher Return on Assets than the Specialty Retail industry average last year.


Return on Capital Employed

ROCE Improving: LOV's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Lovisa Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: LOV's short term assets (A$50.0M) exceeds its short term liabilities (A$38.1M)

Long Term Liabilities: LOV's short term assets (50.0M) exceeds its long term liabilities (7.5M)


Debt to Equity History and Analysis

Debt Level: LOV's debt to equity ratio (14.9%) is considered satisfactory

Reducing Debt: LOV had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: LOV's debt is well covered by operating cash flow (578.7%).

Interest Coverage: LOV earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: LOV has a high level of physical assets or inventory.

Debt Coverage by Assets: LOV's debt is covered by short term assets (assets are 6.260260x debt).


Next Steps

Dividend

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

2.37%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%2.4%markettop25%5.6%industryaverage3.9%forecastin3Years2.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: LOV's dividend (2.37%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: LOV's dividend (2.37%) is low compared to the top 25% of dividend payers in the Australian market (5.59%).

Stable Dividend: Whilst dividend payments have been stable, LOV has been paying a dividend for less than 10 years.

Growing Dividend: LOV's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (94%), 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 (75.6% payout ratio).


Next Steps

Management

What is the CEO of Lovisa Holdings's salary, the management and board of directors tenure and is there insider trading?

1.1yrs

Average board tenure


CEO

Shane Fallscheer 0

0yrs

Tenure

AU$1,959,873

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 ($USD1.34M) is about average for companies of similar size in the Australian market ($USD992.67K).

Compensation vs Earnings: Shane's compensation has increased by more than 20% in the past year.


Board Age and Tenure

1.1yrs

Average Tenure

55yo

Average Age

Experienced Board: LOV's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: LOV insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$100,31713 Sep 19
John Armstrong
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares7,990
Max PriceAU$12.56
BuyAU$014 May 19
FIL Limited
EntityCompany
Shares671,128
Max PriceAU$10.31
SellAU$26,10023 Apr 19
FIL Limited
EntityCompany
Shares2,659
Max PriceAU$10.00
BuyAU$12,039,92323 Apr 19
FIL Limited
EntityCompany
Shares1,218,624
Max PriceAU$10.19
SellAU$8,712,04426 Feb 19
Shane Fallscheer
EntityIndividual
Role
Chief Executive Officer
MD & Executive Director
Shares900,000
Max PriceAU$9.70
BuyAU$9,270,66220 Feb 19
FIL Limited
EntityCompany
Shares1,129,494
Max PriceAU$8.21
SellAU$46,91320 Feb 19
FIL Limited
EntityCompany
Shares5,691
Max PriceAU$8.24
BuyAU$40,459,08416 Jan 19
FIL Limited
EntityCompany
Shares3,925,894
Max PriceAU$10.31

Ownership Breakdown


Management Team

  • Shane Fallscheer

    MD & Executive Director

    • Tenure: 0yrs
    • Compensation: AU$1.96m
  • Damian Babic

    Chief Operating Officer

    • Tenure: 0yrs
  • Andrea Haynes

    Head of Product

    • Tenure: 9.8yrs
  • Chris Lauder

    CFO & Company Secretary

    • Tenure: 2.1yrs
    • Compensation: AU$521.39k

Board Members

  • Brett Blundy (59yo)

    Chairman

    • Tenure: 0.9yrs
    • Compensation: AU$100.00k
  • Jim King (67yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: AU$80.00k
  • John Armstrong (51yo)

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: AU$61.33k
  • Sei Alt (47yo)

    Independent Non-Executive Director

    • Tenure: 0.7yrs
    • Compensation: AU$20.00k
  • Shane Fallscheer

    MD & Executive Director

    • Tenure: 0yrs
    • Compensation: AU$1.96m
  • Tracey Blundy

    Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: AU$80.00k
  • Nico Van Der Merwe

    Director

    • Tenure: 0.7yrs

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$1.470b
  • Shares outstanding: 105.77m
  • 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 to fashion ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 10:40
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.