Head to Head Comparison: Lovesac (NASDAQ:LOVE) versus Driven Brands (NASDAQ:DRVN)

Driven Brands (NASDAQ:DRVN) and Lovesac (NASDAQ:LOVE) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Institutional & Insider Ownership

77.1% of Driven Brands shares are owned by institutional investors. Comparatively, 91.3% of Lovesac shares are owned by institutional investors. 4.4% of Driven Brands shares are owned by company insiders. Comparatively, 7.8% of Lovesac shares are owned by company 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 for Driven Brands and Lovesac, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Driven Brands	1	8	6	2	2.53
Lovesac	0	1	3	0	2.75

Driven Brands presently has a consensus price target of $16.23, suggesting a potential upside of 38.00%. Lovesac has a consensus price target of $21.33, suggesting a potential upside of 38.35%. Given Lovesac’s stronger consensus rating and higher probable upside, analysts plainly believe Lovesac is more favorable than Driven Brands.

Valuation & Earnings

This table compares Driven Brands and Lovesac”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Driven Brands	$1.86 billion	1.04	$140.16 million	$1.04	11.31
Lovesac	$697.11 million	0.32	$4.07 million	$1.22	12.64

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Driven Brands	8.61%	24.13%	5.03%
Lovesac	2.56%	2.57%	1.02%

Risk & Volatility

Driven Brands has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Lovesac has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500.

Summary

Driven Brands beats Lovesac on 8 of the 15 factors compared between the two stocks.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.

About Lovesac

The Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and other products comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products primarily through www.lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 41 states in the United States; and in store pop-up- shops and shop-in-shops, and barter inventory transactions. The Lovesac Company was founded in 1995 and is based in Stamford, Connecticut.