Stitch Fix (NASDAQ:SFIX) Trading 10.4% Higher - Here's What Happened

Key Points

• Shares jumped 10.4% Wednesday to $3.675 amid light trading (741,270 shares vs. a ~2.2M average), valuing Stitch Fix at about $495 million.
• Stitch Fix beat quarterly expectations with EPS of $(0.02) versus $(0.05) expected and revenue of $341.3M (+9.4% YoY), but the company remains unprofitable with negative net margin and return on equity.
• Analyst sentiment is weak — a consensus rating of "Reduce" with a $5 target after several downgrades and cuts — and insiders sold 316,757 shares last quarter (including the CFO and founder), while institutions own about 71% of the stock.

Stitch Fix, Inc. (NASDAQ:SFIX - Get Free Report)'s share price traded up 10.4% on Wednesday . The company traded as high as $3.72 and last traded at $3.6750. 741,270 shares were traded during trading, a decline of 66% from the average session volume of 2,200,593 shares. The stock had previously closed at $3.33.

Analyst Ratings Changes

A number of research analysts have recently weighed in on the company. Weiss Ratings restated a "sell (d-)" rating on shares of Stitch Fix in a research report on Thursday, January 22nd. UBS Group cut their price objective on Stitch Fix from $6.00 to $4.00 and set a "neutral" rating for the company in a research report on Tuesday, March 3rd. Wall Street Zen lowered Stitch Fix from a "buy" rating to a "hold" rating in a research report on Saturday, January 3rd. William Blair reaffirmed a "mixed" rating on shares of Stitch Fix in a report on Friday, March 6th. Finally, Telsey Advisory Group lowered their price target on shares of Stitch Fix from $6.00 to $5.00 and set a "market perform" rating for the company in a report on Thursday, March 12th. Four research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock currently has a consensus rating of "Reduce" and a consensus target price of $5.00.

Stitch Fix Trading Up 8.9%

The stock has a 50-day simple moving average of $3.43 and a two-hundred day simple moving average of $4.27. The firm has a market capitalization of $494.89 million, a P/E ratio of -27.88 and a beta of 2.33.

Stitch Fix (NASDAQ:SFIX - Get Free Report) last issued its earnings results 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. The business had revenue of $341.30 million during the quarter, compared to analyst estimates of $334.74 million. Stitch Fix had a negative return on equity of 12.23% and a negative net margin of 1.89%.Stitch Fix's revenue was up 9.4% on a year-over-year basis. During the same period in the previous year, the company posted ($0.05) EPS. As a group, research analysts expect that Stitch Fix, Inc. will post -0.44 EPS for the current year.

Insider Activity

In other news, Director Katrina Lake sold 8,835 shares of the company's stock in a transaction dated Monday, February 2nd. The stock was sold at an average price of $5.01, for a total value of $44,263.35. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. Also, CFO David Aufderhaar sold 65,709 shares of the company's stock in a transaction dated Tuesday, April 7th. The stock was sold at an average price of $3.09, for a total transaction of $203,040.81. Following the completion of the transaction, the chief financial officer owned 1,178,037 shares of the company's stock, valued at approximately $3,640,134.33. This trade represents a 5.28% 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. Insiders sold a total of 316,757 shares of company stock valued at $1,391,580 in the last quarter. 16.09% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Stitch Fix

A number of institutional investors and hedge funds have recently added to or reduced their stakes in SFIX. Invesco Ltd. raised its holdings in shares of Stitch Fix by 5.5% in the 4th quarter. Invesco Ltd. now owns 460,236 shares of the company's stock valued at $2,416,000 after buying an additional 24,124 shares during the period. XTX Topco Ltd acquired a new position in Stitch Fix during the 4th quarter worth approximately $593,000. Tudor Investment Corp ET AL acquired a new position in Stitch Fix during the 4th quarter worth approximately $138,000. Millennium Management LLC increased its holdings in shares of Stitch Fix by 102.7% in the 4th quarter. Millennium Management LLC now owns 297,276 shares of the company's stock valued at $1,561,000 after acquiring an additional 150,653 shares during the last quarter. Finally, Man Group plc purchased a new position in shares of Stitch Fix in the 4th quarter valued at about $115,000. Hedge funds and other institutional investors own 71.04% of the company's stock.

Stitch Fix Company Profile

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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