Lovesac's (NASDAQ: LOVE) modular couch concept has been a big hit with consumers, but you wouldn't know it by looking at the stock's performance. Shares of Lovesac are down 60% year to date, and trade at a cheap valuation of less than 10 times this year's earnings estimates. 

The underperformance reflects the market's anticipation that the weak economy will eventually become a drag on sales. But here are four reasons why the stock could be a surprise winner in the new year.

In September, the company reported a 45% year-over-year sales increase for the second quarter, which ended in July. Next quarter's results will be announced on Dec. 7 before the markets open, and Wall Street analysts anticipate sales decelerating to a 25% growth rate. But that's still very impressive in this challenging retail environment. 

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Source Fool.com