Stitch Fix Inc. (SFIX) expanding its growth trajectory ahead

Stitch Fix Inc. (NASDAQ: SFIX) stock jumped 8.96% on Friday to $4.50 against a previous-day closing price of $4.13. With 2.33 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.99 million shares. During the session, the Specialty Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $4.5300 whereas the lowest price it dropped to was $4.0996. The 52-week range on SFIX shows that it touched its highest point at $17.16 and its lowest point at $2.63 during that stretch. It currently has a 1-year price target of $4.45. Beta for the stock currently stands at 2.04.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SFIX was up-trending over the past week, with a rise of 4.41%, but this was up by 46.10% over a month. Three-month performance surged to 26.05% while six-month performance fell -32.33%. The stock lost -71.77% in the past year, while it has gained 44.69% so far this year. A look at the trailing 12-month EPS for SFIX yields -2.38 with Next year EPS estimates of -1.20. For the next quarter, that number is -0.34. This implies an EPS growth rate of -799.10% for this year and 17.40% for next year. EPS is expected to grow by 29.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 36.03%.

Float and Shares Shorts:

At present, 112.36 million SFIX shares are outstanding with a float of 80.78 million shares on hand for trading. On Oct 13, 2022, short shares totaled 15.89 million, which was 14.34% higher than short shares on Sep 14, 2022. In addition to Ms. Katrina M. Lake as the firm’s Founder & Exec. Chairperson, Ms. Elizabeth Spaulding serves as its CEO & Director.


Institutional Ownership:

Through their ownership of 89.37% of SFIX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 59.18% of SFIX, in contrast to 29.83% held by mutual funds. Shares owned by individuals account for 24.53%. As the largest shareholder in SFIX with 14.03% of the stake, Working Capital Advisors holds 11,979,753 shares worth 11,979,753. A second-largest stockholder of SFIX, The Vanguard Group, Inc., holds 7,298,470 shares, controlling over 8.55% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SFIX, holding 5,631,049 shares or 6.59% stake. With a 4.68% stake in SFIX, the Opportunity Trust is the largest stakeholder. A total of 4,000,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.56% of SFIX stock, is the second-largest Mutual Fund holder. It holds 2,188,730 shares valued at 6.81 million. iShares Russell 2000 ETF holds 2.17% of the stake in SFIX, owning 1,852,001 shares worth 5.76 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SFIX since 19 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 17 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SFIX analysts setting a high price target of $6.00 and a low target of $3.00, the average target price over the next 12 months is $4.42. Based on these targets, SFIX could surge 33.33% to reach the target high and fall by -33.33% to reach the target low. Reaching the average price target will result in a decline of -1.78% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SFIX will report FY 2023 earnings on 10/03/2023. Analysts have provided yearly estimates in a range of -$1.11 being high and -$1.72 being low. For SFIX, this leads to a yearly average estimate of -$1.44. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Stitch Fix Inc. surprised analysts by -$0.03 when it reported -$0.50 EPS against a consensus estimate of -$0.47. The surprise factor in the prior quarter was -$0.26. Based on analyst estimates, the high estimate for the next quarter is -$0.19 and the low estimate is -$0.45. The average estimate for the next quarter is thus -$0.34.

Summary of Insider Activity:

Insiders traded SFIX stock several times over the past three months with 6 Buys and 5 Sells. In these transactions, 393,387 shares were bought while 88,200 shares were sold. The number of buy transactions has increased to 13 while that of sell transactions has risen to 19 over the past year. The total number of shares bought during that period was 2,771,868 while 271,637 shares were sold.

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