This company had a hot 2017 initial public offering and the shares still have big-time potential upside for investors. Stitch Fix Inc. (NASDAQ: SFIX) is an online personal styling service that delivers personalized fixes of apparel and accessories for men, women and kids.
Stitch Fix is a first-of-its-kind, leading data-driven apparel disruptor. Across Wall Street, many feel that the secular trend of consumer purchasing habits moving online from offline will only continue. The company’s data-driven and differentiated business model creates powerful network effects and a defensible moat on both the front-end (customer acquisition) and back-end (logistics). In addition, the private label strategy, which should continue to help enhance customer satisfaction and customer loyalty, as well as prove accretive to operating margins over time.
The company reported very solid results, and the analyst said this:
Stitch Fix reported fiscal first quarter 2021 net revenue of $490 million (versus consensus of $481 million) and Adj. EBITDA of $6.9 million versus the consensus of $1.6 million, driven by a quarter over quarter increase of 240,000 active clients and record success rates. As apparel recovers, we continue to believe the share shift to ecommerce will become more apparent, driving a catch-up in company performance, particularly as operations normalize, incremental revenue streams like Direct Buy outgrow the core, and retail store closures across the apparel category further force consumers online.
Goldman Sachs raised its $34 price target to $58. The consensus figure is $34.22, and Stitch Fix stock was last seen trading at $49.89, after a stunning 39% gain following the outstanding earnings report.
These three stocks have been absolutely on fire. While they remain great ideas for aggressive growth investors, it may make sense to just buy partial positions and see if there is not some year-end selling. Many on Wall Street feel that we may see larger than normal selling in front of 2021, as the Democrats likely will raise capital gains taxes if they indeed take control.