La-Z-Boy (LZB), What Is Drawing Fresh Attention Now?

La-Z-Boy store expansion puts direct retail in focus

La-Z-Boy (LZB) just reached a record 237 company-owned locations across the U.S., now covering more than 62% of its store base. This expansion is putting direct-to-consumer retail squarely on investors’ radar.

Recent price action has been choppy. The share price is around $29.98 after declining 27.4% over the past 90 days, while the 1 year total shareholder return is down 5.9%. La-Z-Boy’s expanding retail footprint therefore comes against fading short term momentum, but with a still positive 3 year total shareholder return of 12%.

Scan beyond La-Z-Boy’s store expansion and see how other furniture and home-focused stocks with solid fundamentals are setting up on the list of solid balance sheet and fundamentals (24 results).

La-Z-Boy has increased its store count to a record level while the share price has moved in the opposite direction. Has most of the upside already occurred earlier, or does the current valuation still leave meaningful room ahead?

Most Popular Narrative: 26.9% Undervalued

On the most followed view, La-Z-Boy’s fair value sits at $41 per share compared with the recent $29.98 price, which puts the current store expansion and margin work in a different light.

The key factor is that La-Z-Boy executes its supply chain and portfolio consolidation, including the shift to three distribution hubs and the exit of noncore lines, without allowing friction costs and Joybird weakness to erode the benefits to margins.

The current valuation implies the share price does not fully reflect the potential uplift from higher-margin company-owned retail, a streamlined North American upholstery focus, and ongoing cash generation that supports sizeable buybacks.

See why 2 investors see La-Z-Boy as 27% undervalued.

Result: Fair Value of $41 (UNDERVALUED)

Still, La-Z-Boy’s recent GAAP operating loss and ongoing Joybird drag mean any slip in execution or prolonged weakness there could quickly challenge this undervalued thesis.

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

Next Steps

Mixed signals on La-Z-Boy’s outlook can pull you in either direction, so move quickly to review the full picture and weigh the 2 key rewards and 3 important warning signs.

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