Lovisa Holdings Ltd (ASX: LOV) shares have tumbled 8.74% to $20.405 in afternoon trade on Thursday. The drop means the consumer stock is now 29.58% lower over the month and 14.35% below where it was this time last year.
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What has happened to the ASX 200 stock's share price?
There hasn't been any price-sensitive news out of Lovisa recently to explain the share price tumble today.
But the company is facing an overall dip in confidence following its half-year FY26 announcement last month. The announcement raised concerns about the company's earnings and raised a red flag about its sales momentum.
Lovisa posted a revenue increase of 23.3% to $500.7 million, with comparable store sales up 2.2%. Its underlying net profit came in at $69.6 million, up 21.5%, while the net profit including one-offs was $58.4 million. Lovisa also raised its interim dividend to 53 cents, 50% franked, up from 50 cents.
The ASX 200 company's profit result missed analysts' expectations by a wide margin. Markets estimated that Lovisa would report a net profit of $68.1 million for the six-month period.
The share price has now crashed over 33% since the announcement.
Despite the share price drop this year, Lovisa shares have performed very strongly over the past five years. It's possible that after a 12% hike between the beginning of January and mid-February this year, investors have decided it's time to take their profits off the table.
Can the share price recover?
Analysts seem to think so.
After the heavy pullback, some brokers think that the company's expansion plans and robust revenue growth imply we could see much more from the jewellery retailer this year.
Lovisa is steadily increasing its global footprint, pushing further into North American and European markets. At the same time, it has managed to maintain strong momentum in established markets. Lovia's store rollouts are central to its growth strategy, and management has now demonstrated that it is able to execute growth across various regions.
While its latest results missed market expectations, it's worth noting that the company has still managed to lift revenue in the first half of FY26, despite broad retail-sector weakness.
TradingView data shows that analyst sentiment about the outlook for Lovisa shares is mixed, but they all appear to agree that the current trading price is below fair value.
Out of 16 analysts, seven have a buy or strong buy rating on the stock, and another eight have a hold rating. The average target price is $30.85 a piece, which implies a 50.22% upside at the time of writing.
But others are more bullish. The team at Morgans has a buy rating and a $36.80 target price on the stock, implying a 79.21% upside at the time of writing.
The broker said its result was ahead of its expectations, driven by store network growth and strong gross margins. The team see the pullback in share price as a buying opportunity at 23x FY27's price-to-earnings (P/E) ratio.
