Wall Street Zen Downgrades Stitch Fix (NASDAQ:SFIX) to Hold

Key Points

• Wall Street Zen downgraded Stitch Fix (NASDAQ:SFIX) from "buy" to "hold," joining other firms that have trimmed ratings and price targets; the stock's consensus from analysts is a "Reduce" with an average price target of $5.00.
• Stitch Fix beat the most recent quarter's EPS and revenue estimates but remains unprofitable (negative net margin of 1.89% and negative ROE of 12.23%), trades around $3.79 with a market cap of about $517 million, and analysts expect roughly -0.19 EPS for the year.
• Company insiders have been net sellers recently—including sales by founder Katrina Lake and CFO David Aufderhaar (134,544 shares sold in the last three months)—though insiders still own 16.09% of the stock and institutional investors hold about 71.04%.

Stitch Fix (NASDAQ:SFIX - Get Free Report) was downgraded by research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a report released on Saturday.

Other analysts also recently issued reports about the stock. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Stitch Fix in a report on Tuesday, April 21st. UBS Group decreased their price objective on shares of Stitch Fix from $6.00 to $4.00 and set a "neutral" rating for the company in a report on Tuesday, March 3rd. William Blair reaffirmed a "mixed" rating on shares of Stitch Fix in a report on Friday, March 6th. Finally, Telsey Advisory Group decreased their price objective 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 investment analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat, Stitch Fix has an average rating of "Reduce" and an average price target of $5.00.

Stitch Fix Stock Up 4.1%

NASDAQ SFIX opened at $3.79 on Friday. The stock has a market capitalization of $517.41 million, a PE ratio of -29.15 and a beta of 2.33. The company has a 50 day moving average price of $3.40 and a two-hundred day moving average price of $4.23. Stitch Fix has a 12-month low of $2.95 and a 12-month high of $5.94.

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

Insider Buying and Selling

In related news, Director Katrina Lake sold 8,835 shares of the company's stock in a transaction on Monday, February 2nd. The shares were sold at an average price of $5.01, for a total transaction of $44,263.35. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CFO David Aufderhaar sold 65,709 shares of the company's stock in a transaction on Tuesday, April 7th. The shares were sold at an average price of $3.09, for a total transaction of $203,040.81. Following the transaction, the chief financial officer owned 1,178,037 shares of the company's stock, valued at approximately $3,640,134.33. The trade was a 5.28% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 134,544 shares of company stock valued at $432,104. Company insiders own 16.09% of the company's stock.

Hedge Funds Weigh In On Stitch Fix

Several large investors have recently bought and sold shares of the stock. Hsbc Holdings PLC raised its stake in Stitch Fix by 40.7% during the 1st quarter. Hsbc Holdings PLC now owns 66,913 shares of the company's stock valued at $224,000 after purchasing an additional 19,363 shares during the last quarter. First Dallas Securities Inc. acquired a new position in Stitch Fix during the 1st quarter valued at $38,000. Krilogy Financial LLC acquired a new position in Stitch Fix during the 1st quarter valued at $46,000. Invesco Ltd. raised its stake in Stitch Fix by 5.5% during the 4th quarter. Invesco Ltd. now owns 460,236 shares of the company's stock valued at $2,416,000 after purchasing an additional 24,124 shares during the last quarter. Finally, XTX Topco Ltd acquired a new position in Stitch Fix during the 4th quarter valued at $593,000. 71.04% of the stock is currently owned by institutional investors and hedge funds.

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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