La-Z-Boy (LZB): Assessing Valuation After Recent Share Price Decline and Retail Growth Plans

La-Z-Boy (LZB) shares have seen notable movement this month, a reflection of shifting trends in the home furnishings sector and recent updates on company performance. For investors, this offers a fresh perspective on La-Z-Boy’s valuation and outlook.

See our latest analysis for La-Z-Boy.

After a tough stretch, La-Z-Boy’s recent 30-day share price return of -8.58% and year-to-date dip of -27.18% reflect a market that remains cautious despite a solid record of long-term value creation. The company has achieved a 3-year total shareholder return of 35.82%, which is well above broader industry trends. Momentum has faded lately, but the company’s performance over the past few years highlights both its resilience and the dynamic nature of the home furnishings sector.

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With shares still trading below analyst price targets and signs of underlying profit growth, investors may be wondering if La-Z-Boy is undervalued or if the current price already factors in the company’s future prospects.

Most Popular Narrative: 23.3% Undervalued

With La-Z-Boy closing at $31.45 and the narrative fair value placed at $41.00, the story here is that the market is currently pricing the stock well below what the most widely followed narrative believes is justified. This gap invites attention to the assumptions driving that higher fair value and sets the stage for a deeper look into the catalysts behind the estimate.

Expansion of company-owned retail stores, including a significant new 15-store acquisition and plans to open 15 new stores this year, positions La-Z-Boy to capture increased demand from new homeownership and consumer investment in home comfort. This supports future revenue growth and market share gains.

Read the complete narrative.

Curious what’s powering that high target? The narrative’s bullish case hints at aggressive growth from retail expansion and a big profit margin boost. Want to find out which key assumptions transform La-Z-Boy’s current price and how bold financial forecasts have led to such a pronounced discount? You’ll want to see just how ambitious these revenue and earnings projections get.

Result: Fair Value of $41.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak store traffic and margin pressure from new store expansions could limit La-Z-Boy’s ability to achieve its projected growth.

Find out about the key risks to this La-Z-Boy narrative.

Another View: Multiples Tell a Different Story

A quick look at the company’s price-to-earnings ratio shows La-Z-Boy trading at 14.1 times earnings, a clear premium to both its peers and the broader US Consumer Durables industry, which hover around 10.6 times. Even compared to its “fair ratio” of 13.5 times, the current price appears somewhat stretched, suggesting that investors may be expecting faster growth or perceiving less risk than the numbers support. Does this higher valuation signal lasting confidence, or could it mean the stock has already run ahead of itself?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own La-Z-Boy Narrative

If you think there’s more to the story or want to reach your own conclusion, you can review the numbers on your own and develop a personal perspective in just a few minutes, then Do it your way.

A great starting point for your La-Z-Boy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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