Wall Street Zen Upgrades Stitch Fix (NASDAQ:SFIX) to Buy

Key Points

• Wall Street Zen upgraded Stitch Fix (NASDAQ:SFIX) from a "hold" to a "buy" rating in a research note issued Saturday.
• Despite that upgrade, the broader sell‑side view is negative — four analysts rate the stock a Hold, one a Sell, the average recommendation is "Reduce" and the consensus target price is $5.00.
• Stitch Fix slightly beat quarterly estimates (EPS -$0.02 vs -$0.05 expected; revenue $341.3M vs $334.7M) and revenue rose 9.4% year‑over‑year, but the company remains unprofitable with negative margins and insiders have been selling shares.

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

Other equities research analysts also recently issued research reports about the company. William Blair reissued a "mixed" rating on shares of Stitch Fix in a research report on Friday, March 6th. Weiss Ratings reissued a "sell (d-)" rating on shares of Stitch Fix in a research report on Thursday, January 22nd. Telsey Advisory Group lowered their price target on Stitch Fix from $6.00 to $5.00 and set a "market perform" rating for the company in a research report on Thursday, March 12th. Finally, UBS Group lowered their price target 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. Four research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the stock has an average rating of "Reduce" and a consensus target price of $5.00.

Stitch Fix Stock Up 4.1%

Shares of NASDAQ:SFIX opened at $3.85 on Friday. The business has a fifty day simple moving average of $3.39 and a 200-day simple moving average of $4.25. Stitch Fix has a 52 week low of $2.87 and a 52 week high of $5.94. The company has a market cap of $525.60 million, a P/E ratio of -29.62 and a beta of 2.33.

Stitch Fix (NASDAQ:SFIX - Get Free Report) last posted its quarterly 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. Stitch Fix had a negative return on equity of 12.23% and a negative net margin of 1.89%.The firm had revenue of $341.30 million during the quarter, compared to the consensus estimate of $334.74 million. During the same quarter in the previous year, the business earned ($0.05) earnings per share. The firm's quarterly revenue was up 9.4% compared to the same quarter last year. Sell-side analysts expect that Stitch Fix will post -0.44 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Stitch Fix news, insider Casey O'connor sold 83,641 shares of the business's stock in a transaction dated Tuesday, January 20th. The stock was sold at an average price of $5.16, for a total transaction of $431,587.56. Following the transaction, the insider owned 542,071 shares in the company, valued at $2,797,086.36. The trade was a 13.37% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Katrina Lake sold 8,835 shares of the business'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. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 316,757 shares of company stock worth $1,391,580 over the last quarter. 16.09% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the stock. Working Capital Advisors UK Ltd. lifted its stake in shares of Stitch Fix by 15.9% in the third quarter. Working Capital Advisors UK Ltd. now owns 11,046,077 shares of the company's stock worth $48,050,000 after acquiring an additional 1,512,475 shares in the last quarter. State of Michigan Retirement System lifted its stake in shares of Stitch Fix by 122.3% in the third quarter. State of Michigan Retirement System now owns 726,983 shares of the company's stock worth $3,162,000 after acquiring an additional 400,000 shares in the last quarter. Hodges Capital Management Inc. lifted its stake in shares of Stitch Fix by 20.0% in the third quarter. Hodges Capital Management Inc. now owns 1,737,556 shares of the company's stock worth $7,558,000 after acquiring an additional 289,905 shares in the last quarter. Hudson Bay Capital Management LP acquired a new position in shares of Stitch Fix in the third quarter worth about $61,000. Finally, Counterpoint Mutual Funds LLC acquired a new position in shares of Stitch Fix in the third quarter worth about $473,000. Institutional investors and hedge funds 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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