Northland Securities Initiates Coverage on Stitch Fix (NASDAQ:SFIX)

Key Points

• Northland Securities initiated coverage on Stitch Fix with an “outperform” rating and a $5.00 price target, implying about 37.6% upside from the current share price.
• Analyst sentiment overall remains cautious: Stitch Fix now has an average “Hold” rating and a consensus price target of $5.00, with recent firms including UBS and Telsey cutting targets and ratings.
• The company recently reported quarterly results that beat earnings and revenue estimates, with revenue up 9.4% year over year, though insiders have continued selling shares in pre-arranged transactions.

Equities researchers at Northland Securities began coverage on shares of Stitch Fix (NASDAQ:SFIX - Get Free Report) in a research report issued on Thursday, MarketBeat.com reports. The brokerage set an "outperform" rating and a $5.00 price target on the stock. Northland Securities' price target points to a potential upside of 37.55% from the stock's current price.

SFIX has been the topic of a number of other research reports. UBS Group dropped their price target on shares of Stitch Fix from $6.00 to $4.00 and set a "neutral" rating on the stock in a research note on Tuesday, March 3rd. Weiss Ratings restated a "sell (d-)" rating on shares of Stitch Fix in a research note on Tuesday, April 21st. William Blair reaffirmed a "mixed" rating on shares of Stitch Fix in a report on Friday, March 6th. Telsey Advisory Group dropped their target price on shares of Stitch Fix from $6.00 to $5.00 and set a "market perform" rating on the stock in a research note on Thursday, March 12th. Finally, Wall Street Zen cut shares of Stitch Fix from a "buy" rating to a "hold" rating in a report on Saturday, May 2nd. One investment analyst has rated the stock with a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Hold" and an average price target of $5.00.

Stitch Fix Stock Performance

Shares of SFIX traded up $0.11 during mid-day trading on Thursday, reaching $3.64. The company had a trading volume of 193,448 shares, compared to its average volume of 2,042,644. The firm has a 50-day moving average price of $3.42 and a 200 day moving average price of $4.11. Stitch Fix has a 52 week low of $2.95 and a 52 week high of $5.94. The company has a market capitalization of $496.25 million, a price-to-earnings ratio of -28.15 and a beta of 2.33.

Stitch Fix (NASDAQ:SFIX - Get Free Report) last posted its quarterly earnings data on Wednesday, March 11th. The company reported ($0.02) earnings per share for the quarter, beating analysts' consensus estimates of ($0.05) by $0.03. Stitch Fix had a negative return on equity of 12.23% and a negative net margin of 1.89%.The company had revenue of $341.30 million during the quarter, compared to analyst estimates of $334.74 million. During the same quarter last year, the company earned ($0.05) EPS. The firm's revenue for the quarter was up 9.4% on a year-over-year basis. As a group, research analysts forecast that Stitch Fix will post -0.19 earnings per share for the current fiscal year.

Insider Activity

In other news, CFO David Aufderhaar sold 65,709 shares of Stitch Fix stock in a transaction that occurred on Tuesday, April 7th. The shares were sold at an average price of $3.09, for a total value of $203,040.81. Following the completion of the sale, the chief financial officer directly owned 1,178,037 shares in the company, valued at $3,640,134.33. The trade was a 5.28% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Casey O'connor sold 60,000 shares of the stock in a transaction that occurred on Friday, April 10th. The shares were sold at an average price of $3.08, for a total transaction of $184,800.00. Following the transaction, the insider owned 480,334 shares in the company, valued at approximately $1,479,428.72. This trade represents a 11.10% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 16.09% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Stitch Fix

Several hedge funds and other institutional investors have recently modified their holdings of the company. Farther Finance Advisors LLC increased its holdings in Stitch Fix by 52.1% during the fourth quarter. Farther Finance Advisors LLC now owns 9,719 shares of the company's stock valued at $51,000 after buying an additional 3,329 shares during the last quarter. Royal Bank of Canada grew its position in shares of Stitch Fix by 324.6% during the 4th quarter. Royal Bank of Canada now owns 10,998 shares of the company's stock valued at $57,000 after acquiring an additional 8,408 shares during the period. CIBC Bancorp USA Inc. purchased a new stake in shares of Stitch Fix in the 3rd quarter worth $50,000. First Dallas Securities Inc. purchased a new stake in shares of Stitch Fix in the 1st quarter worth $38,000. Finally, Blair William & Co. IL bought a new position in Stitch Fix in the 4th quarter worth $66,000. 71.04% of the stock is owned by institutional investors.

About Stitch Fix

Stitch Fix, Inc, headquartered in San Francisco, California, is a leading online personal styling service that blends data science with human expertise to deliver curated clothing and accessory selections. Founded in 2011 by Katrina Lake, the company pioneered a subscription-based model in which customers receive periodic “Fixes” tailored to their personal style, size and budget. Each shipment arrives with several handpicked items along with styling notes, allowing clients to review, purchase and return pieces at their convenience.

Clients begin by completing an online style profile that captures their measurements, design preferences and lifestyle needs.

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