Head to Head Review: Lovesac (NASDAQ:LOVE) and Caleres (NYSE:CAL)

Caleres (NYSE:CAL) and Lovesac (NASDAQ:LOVE) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Risk & Volatility

Caleres has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, Lovesac has a beta of 2.12, indicating that its stock price is 112% more volatile than the S&P 500.

Institutional & Insider Ownership

98.4% of Caleres shares are owned by institutional investors. Comparatively, 91.3% of Lovesac shares are owned by institutional investors. 3.1% of Caleres shares are owned by insiders. Comparatively, 7.8% of Lovesac shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Caleres and Lovesac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caleres	1.85%	7.84%	2.42%
Lovesac	2.56%	2.57%	1.02%

Valuation and Earnings

This table compares Caleres and Lovesac”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caleres	$2.76 billion	0.16	-$6.69 million	$1.50	8.77
Lovesac	$697.11 million	0.32	$4.07 million	$1.22	12.48

Lovesac has lower revenue, but higher earnings than Caleres. Caleres is trading at a lower price-to-earnings ratio than Lovesac, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Caleres and Lovesac, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caleres	0	3	0	0	2.00
Lovesac	0	1	3	0	2.75

Lovesac has a consensus target price of $21.33, indicating a potential upside of 40.07%. Given Lovesac’s stronger consensus rating and higher possible upside, analysts plainly believe Lovesac is more favorable than Caleres.

Summary

Lovesac beats Caleres on 9 of the 14 factors compared between the two stocks.

About Caleres

Caleres is a footwear company that designs, develops, sources, markets and sells shoes through retail stores, e-commerce and wholesale partnerships. Its brands include Famous Footwear, Allen Edmonds, Sam Edelman, Naturalizer and Vionic, serving customers across a range of styles and price points. The company operates Famous Footwear, a retailer of family footwear, and sells branded products through its own stores and online channels as well as through department stores and other retailers. Caleres serves customers primarily in the United States, with its brands also distributed in international markets.

About Lovesac

Lovesac Company designs, manufactures and sells furniture and related home furnishings. Its products include Sactionals, a modular seating system that customers can configure and reconfigure, and Sacs, oversized foam-filled chairs. The company also offers accessories such as washable covers, pillows and tables. Founded by Shawn Nelson in 1995, Lovesac sells primarily through its e-commerce platform and company-operated showrooms, with additional sales through other channels. Its business and retail presence are focused mainly on the United States.