La-Z-Boy (LZB) Valuation: Assessing the Impact of Earnings, Dividend Hike, and New Guidance

La-Z-Boy (LZB) has released its second quarter results, highlighting steady sales while reporting a dip in net income compared to last year. The company also raised its dividend by 10% and issued new sales guidance.

See our latest analysis for La-Z-Boy.

La-Z-Boy’s share price has surged 33% in the last week alone, fueled by stronger sales guidance and a fifth straight year of big dividend hikes. However, the stock still sits nearly 9% lower year-to-date. Over the long run, shareholders have seen a total return of 58% over three years, reflecting steady growth despite recent ups and downs. Momentum seems to be building again as recent results hint at a more confident outlook from management.

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With shares still down year-to-date but recent earnings and guidance fueling momentum, the key question is whether La-Z-Boy is trading at a true discount or if investors are already factoring in its renewed growth prospects.

Most Popular Narrative: 4.1% Undervalued

With La-Z-Boy’s fair value set at $41 and shares last closing at $39.32, the most widely followed narrative points to mild undervaluation. This sets the stage for deeper discussion, especially considering management’s latest strategic shifts and sharper analyst forecasts.

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.

Want to see what drives this fair value? The critical factor is how bold expansion and a changing consumer landscape are locked into the math. The full narrative uncovers the projections for future growth, margins, and profitability. These are details you can’t afford to miss if you follow this stock’s story closely.

Result: Fair Value of $41 (UNDERVALUED)

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

However, persistent weakness in store traffic or prolonged margin pressure could undermine La-Z-Boy's growth story and challenge analysts' fair value narrative.

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

Another View: Market Multiples Raise Questions

While our earlier valuation saw La-Z-Boy as mildly undervalued, the company’s current price-to-earnings ratio of 17.9x is notably higher than both the US Consumer Durables average (11.8x) and its peer group (11.1x). It even tops the fair ratio of 14.5x, which suggests that optimism may already be priced in. Does this premium signal real growth or extra risk?

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

Build Your Own La-Z-Boy Narrative

Want to put your own spin on the numbers or challenge these conclusions? You can craft your perspective and see the story for yourself in just a few minutes with 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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