Stitch Fix (SFIX) AI Stock Analysis

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Stitch Fix

(NASDAQ:SFIX)

Rating:52Neutral

Price Target:

$4.00

▲(1.01%Upside)

Stitch Fix's overall stock score reflects significant challenges, including declining revenues, negative profitability, and valuation concerns. Despite these issues, some optimism is derived from a return to revenue growth and improvements in client metrics as reported in the latest earnings call.

Positive Factors

Annual Guidance

Stitch Fix shares are pushing higher post-market following a better-than-planned fiscal Q2 print and raise of annual guidance.

Product and Customer Engagement

Ongoing improvements in operating metrics such as average order value, client retention, and engagement are promising signs of stabilization.

Revenue Growth

Stitch Fix achieved 0.7% year-over-year revenue growth in its fiscal third quarter, a year ahead of schedule.

Negative Factors

Conservatism in Outlook

There is uncertainty about how much conservatism is included in the outlook, particularly regarding the active customer step-back management is guiding to in the fiscal fourth quarter.

Customer Base Decline

The overall active client base declined (15.5%) year-over-year to 2.4M, essentially in line with estimates.

Market Sentiment

Management is expressing caution into the next fiscal year, which could keep market exuberance tempered.

Stitch Fix (SFIX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$516.73M

Dividend YieldN/A

Average Volume (3M)2.05M

Price to Earnings (P/E)―

Beta (1Y)2.04

Revenue Growth-8.48%

EPS Growth55.77%

CountryUS

Employees4,570

SectorConsumer Cyclical

Sector Strength58

IndustryApparel - Retail

Share Statistics

EPS (TTM)-0.06

Shares Outstanding114,225,430

10 Day Avg. Volume3,215,874

30 Day Avg. Volume2,052,385

Financial Highlights & Ratios

PEG Ratio0.16

Price to Book (P/B)2.28

Price to Sales (P/S)0.00

P/FCF Ratio14.51

Enterprise Value/Market Cap4.48

Enterprise Value/Revenue0.45

Enterprise Value/Gross Profit4.06

Enterprise Value/Ebitda-8.75

Forecast

1Y Price Target

$5.17

Price Target Upside30.56% Upside

Rating ConsensusHold

Number of Analyst Covering4

Stitch Fix Business Overview & Revenue Model

Company DescriptionStitch 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.

How the Company Makes MoneyStitch Fix makes money through a combination of styling fees, product sales, and subscription services. The primary revenue stream comes from the sale of clothing and accessories. Customers pay a styling fee for each 'Fix' that they order, which is credited towards any purchases they make from that shipment. Items that are not purchased are returned to the company. Additionally, Stitch Fix offers a subscription service called 'Style Pass,' where customers pay an annual fee for unlimited styling throughout the year. The company's use of data science to analyze customer preferences and optimize inventory also plays a crucial role in maintaining efficient operations and maximizing sales. Partnerships with various clothing brands and manufacturers help widen their product offerings and enhance customer satisfaction.

Stitch Fix Earnings Call Summary

Earnings Call Date:Jun 10, 2025

(Q3-2025)

% Change Since: -17.33%|

Next Earnings Date:Sep 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a cautious optimism with a return to revenue growth and improvements in key client metrics. However, challenges such as a decline in active clients, gross margin pressures, and potential tariff impacts were noted.

Q3-2025 Updates

Positive Updates

Return to Year-over-Year Revenue Growth

Q3 revenue reached $325 million, marking a return to year-over-year growth with a 0.7% increase. Adjusted EBITDA was $11 million.

Growth in Women's and Men's Business Segments

Women's business and overall Fix channel returned to revenue growth. Men's business and Freestyle channel revenue also grew for the second consecutive quarter.

Improvement in Average Order Value

AOV grew 10% year-over-year, marking the seventh consecutive quarter of AOV growth, driven by larger fixes and improved assortment strategy.

Increased Client Engagement and New Client Growth

For the second consecutive quarter, there was year-over-year new client growth, and the number of active clients on recurring shipments increased for three straight quarters.

Strong Performance in Athleisure and Footwear

Athleisure was up over 30% year-over-year, and sneakers saw a 35% increase, contributing to higher Fix AOVs and growth in Freestyle channel.

Negative Updates

Decline in Active Clients

Net active clients ended the quarter at 2.4 million, down 10.6% year-over-year and down 0.8% quarter-over-quarter.

Challenges with Gross Margin

Gross margin for Q3 was 44.2%, down 130 basis points year-over-year, influenced by lower product margins and mix shift.

Potential Tariff Impact on Future Costs

Current tariff rates could increase costs in FY '26, posing a potential challenge if not mitigated through strategic sourcing and supplier negotiations.

Company Guidance

During the Q3 FY '25 earnings call, Stitch Fix reported a return to year-over-year revenue growth, achieving $325 million in revenue and $11 million in adjusted EBITDA. The company highlighted a 10% increase in Average Order Value (AOV), marking the seventh consecutive quarter of AOV growth, with items per Fix, keep rate, and Average Unit Retail (AUR) all increasing for the second straight quarter. Net active clients ended at 2.4 million, down 10.6% year-over-year, but revenue per active client rose to $542, up 3.2% year-over-year. Gross margin was 44.2%, and advertising expenses accounted for 10.2% of revenue. The company expects Q4 revenue between $298 million and $303 million and adjusted EBITDA between $3 million and $7 million, with full-year FY '25 revenue projected between $1.254 billion and $1.259 billion.

Stitch Fix Financial Statement Overview

Summary

Stitch Fix is experiencing declining revenues and negative profitability margins, with ongoing operational inefficiencies and a reduction in total assets posing significant risks. However, the company maintains manageable leverage and exhibits some resilience in cash flow.

Income Statement

Neutral

Stitch Fix has faced a consistent decline in revenue growth, with the latest TTM showing a decrease in total revenue. The gross profit margin for TTM is 44.65%, which is somewhat stable. However, the net profit margin remains negative at -4.44%, indicating ongoing challenges in profitability. EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.

Balance Sheet

Neutral

The company maintains a moderate debt-to-equity ratio, indicating manageable leverage with a slight improvement in stockholders' equity. The equity ratio stands at 41.34% for TTM, suggesting a decent level of financial stability. However, the overall decline in total assets over the years could be a concern for future financial health.

Cash Flow

Neutral

Free cash flow has seen fluctuations but remains positive in the TTM period, showing some resilience. The operating cash flow to net income ratio is positive, suggesting that the company is generating cash flow despite net losses. However, the free cash flow to net income ratio also indicates that cash flow is not robust enough to cover net income losses entirely.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
1.28B	1.34B	1.59B	2.02B	2.10B	1.71B
	Gross Profit
569.70M	592.04M	691.52M	908.47M	947.64M	754.21M
	EBIT
-67.26M	-133.43M	-155.28M	-208.04M	-63.36M	-51.66M
	EBITDA
-45.75M	-88.94M	-113.16M	-172.28M	-33.43M	-29.05M
	Net Income Common Stockholders
-56.66M	-128.84M	-171.97M	-207.12M	-8.88M	-67.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
234.22M	246.97M	257.60M	212.98M	231.33M	286.49M
	Total Assets
484.75M	486.86M	614.48M	764.53M	819.15M	769.43M
	Total Debt
99.26M	117.50M	154.76M	170.35M	147.32M	164.51M
	Net Debt
-9.65M	-45.36M	-85.81M	39.41M	17.54M	21.05M
	Total Liabilities
284.36M	299.84M	367.17M	441.88M	358.30M	368.39M
	Stockholders Equity
200.39M	187.02M	247.31M	322.65M	460.85M	401.04M
Cash Flow		Free Cash Flow
11.00M	14.24M	38.82M	9.04M	-50.93M	12.67M
	Operating Cash Flow
27.54M	28.21M	57.83M	55.40M	-15.68M	42.88M
	Investing Cash Flow
-101.88M	-78.74M	64.33M	10.23M	39.09M	-70.46M
	Financing Cash Flow
-3.68M	-15.49M	-15.54M	-60.25M	-38.88M	-1.44M

Stitch Fix Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.96

Price Trends

50DMA

3.75

Positive

100DMA

4.09

Negative

200DMA

3.94

Positive

Market Momentum

MACD

0.13

Positive

RSI

42.40

Neutral

STOCH

2.11

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFIX, the sentiment is Negative. The current price of 3.96 is below the 20-day moving average (MA) of 4.42, above the 50-day MA of 3.75, and above the 200-day MA of 3.94, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 42.40 is Neutral, neither overbought nor oversold. The STOCH value of 2.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SFIX.

Stitch Fix Risk Analysis

Stitch Fix disclosed 45 risk factors in its most recent earnings report. Stitch Fix reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Stitch Fix Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TDUP	67 Neutral	$863.20M	―	-69.51%	―	-10.55%	9.27%
DDL	64 Neutral	$455.22M	11.53	47.00%	―	16.90%	―
Sector *	62 Neutral	$6.82B	11.05	2.80%	4.32%	2.67%	-24.92%
CPS	62 Neutral	$382.37M	―	112.26%	―	-3.14%	56.19%
SFIX	52 Neutral	$516.73M	―	-27.37%	―	-8.48%	55.77%
LE	51 Neutral	$269.99M	64.39	1.90%	―	-7.58%	―
ZUMZ	50 Neutral	$212.54M	1,087.27	0.23%	―	3.01%	―

* Consumer Cyclical Sector Average

Performance Comparison

SFIX

Stitch Fix

3.96

0.29

7.90%

ZUMZ

Zumiez

11.96

-6.72

-35.97%

Lands' End

8.86

-5.63

-38.85%

CPS

Cooper-Standard Holdings

21.79

9.45

76.58%

TDUP

thredUP

7.30

5.54

314.77%

DDL

Dingdong

2.10

0.19

9.95%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.