The average target price of SFIX is 4.7 and suggests 30% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 6.0. This translates into 67% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 3.0. This is equivalent to 17% downside potential in the worst case. 

Stitch Fix, Inc. sells a range of apparel, shoes, and accessories through its Website and mobile application in the United States. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags for men, women, and kids under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

Stitch Fix, Inc.

Consumer Cyclical

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

SFIX reported revenue of USD 1 273mn in the last 12 months, down 13% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 53% from FY23 to USD -0.48. Market expects EPS to reach USD -0.31 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 12ppts and its growth decelerated by 30ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -4.0% in the last 12 months, up from -4.5% in FY23. 

Historically, SFIX has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -5.5%, a growth from -8.3% in FY23. 

Stitch Fix, Inc. reported a return on equity (RoE) of -35.7% in the last 12 months, down from -34.4% in FY24. The market consensus projects an RoE of -12.2% in FY25, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -14.9% in the last 12 months, a decrease from -14.0% in FY24. The market analysts predict that RoA will be -5.1% in FY25, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -25.1%, below the peers. The consensus estimate for FY25 for RoCE is -9.9%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -2.1 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SFIX has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is relatively stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, and inadequate interest coverage. We note low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, SFIX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, SFIX is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. Specifically, the stock is overpriced on P/FCF. 

Stitch Fix, Inc.

$ 3.6

2

Stitch Fix, Inc.

$ 3.6

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 3.6

About

About

Stitch Fix, Inc.

$ 3.6

2

Stitch Fix, Inc.

$ 3.6

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 3.6

About

About

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