Shares of Stitch Fix (SFIX - Free Report) were up more than 8% through early afternoon trading Tuesday after analysts from KeyBanc Capital Markets initiated coverage on the stock with an overweight rating and a bullish price target.
Specifically, KeyBanc’s Ed Yruma acknowledged the subscription-based personal shopping service’s unique use of data.
“Stitch Fix's use of data is a significant advantage relative to the traditional apparel/retail competitive set and allows it to build a scalable, yet highly human, recommendation model,” Yruma wrote in a note to clients.
“We think share gains will continue in the core women's market, and that men's, plus, and now kids will help to further accelerate growth.”
Yruma slapped a $38 price target on SFIX, marking a 22% upside to its previous close. In a further display of how the analyst views Stitch Fix in contrast to its traditional retail peers, he also downgraded shares of Nordstrom (JWN - Free Report) and Urban Outfitters (URBN - Free Report) .
Tuesday’s gains add to Stitch Fix’s recent momentum, and the stock has now added more than 30% in the past month. SFIX has also started to generate noticeable earnings estimate revision momentum.
Within the past two months, Stitch Fix has witnessed four positive revisions to its full-year 2018 earnings estimates. The company has seen zero negative revisions to full-year estimates in that time. These positive revisions have lifted the Zacks Consensus Estimate for Stitch Fix’s 2018 earnings by six cents.
Positive earnings estimates have earned SFIX a Zacks Rank #2 (Buy). The stock is also sporting an “A” grade for Growth in our Style Scores system.
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