Lovesac (NASDAQ:LOVE) and Restoration Hardware (NYSE:RH) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Lovesac N/A N/A N/A
Restoration Hardware 4.29% 520.85% 8.96%

Institutional & Insider Ownership

26.4% of Lovesac shares are owned by institutional investors. 29.7% of Restoration Hardware shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Lovesac and Restoration Hardware, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lovesac 0 0 1 0 3.00
Restoration Hardware 1 8 10 0 2.47

Lovesac presently has a consensus target price of $26.00, suggesting a potential upside of 35.06%. Restoration Hardware has a consensus target price of $136.53, suggesting a potential upside of 8.89%. Given Lovesac’s stronger consensus rating and higher probable upside, research analysts plainly believe Lovesac is more favorable than Restoration Hardware.

Valuation and Earnings

This table compares Lovesac and Restoration Hardware’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lovesac N/A N/A N/A N/A N/A
Restoration Hardware $2.44 billion 1.11 $2.17 million $3.05 41.11

Restoration Hardware has higher revenue and earnings than Lovesac.

Summary

Restoration Hardware beats Lovesac on 6 of the 9 factors compared between the two stocks.

Lovesac Company Profile

The Lovesac Company designs, manufactures, and sells foam filled furniture, sectional couches, and related accessories. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and accessories comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products through its 66 showrooms at top tier malls and lifestyle centers in 29 states of the United States, as well as through online. The Lovesac Company was founded in 1998 and is headquartered in Stamford, Connecticut.

Restoration Hardware Company Profile

RH, together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bath ware, d├ęcor, outdoor and garden, tableware, and child and teen furnishings. The company provides its products through its retail galleries; and Source Books, a series of catalogs, as well as online through rh.com, restorationhardware.com, rhbabyandchild.com, rhteen.com, and rhmodern.com, as well as waterworks.com. As of February 3, 2018, it operated a total of 83 retail galleries consisting of 16 design galleries, 47 legacy Galleries, 1 RH modern gallery, and 4 RH baby and child galleries throughout the United States and Canada; and 15 Waterworks showrooms in the United States and in the United kingdom, as well as operated 32 outlet stores throughout the United States and Canada. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California.

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