Back to top

Image: Bigstock

Stitch Fix (SFIX) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

Stitch Fix (SFIX) closed at $26.24 in the latest trading session, marking a +0.15% move from the prior day. This move outpaced the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.43%, and the Nasdaq, a tech-heavy index, lost 0.14%.

Coming into today, shares of the online clothing styling service had gained 6.29% in the past month. In that same time, the Retail-Wholesale sector gained 4.24%, while the S&P 500 gained 3.63%.

SFIX will be looking to display strength as it nears its next earnings release. On that day, SFIX is projected to report earnings of $0.06 per share, which would represent a year-over-year decline of 50%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $452.96 million, up 22.33% from the year-ago period.

SFIX's full-year Zacks Consensus Estimates are calling for earnings of $0.08 per share and revenue of $1.92 billion. These results would represent year-over-year changes of -77.78% and +21.5%, respectively.

Investors should also note any recent changes to analyst estimates for SFIX. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.69% higher. SFIX currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, SFIX is currently trading at a Forward P/E ratio of 349.33. For comparison, its industry has an average Forward P/E of 13.45, which means SFIX is trading at a premium to the group.

Investors should also note that SFIX has a PEG ratio of 23.29 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SFIX's industry had an average PEG ratio of 1.39 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 98, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

Published in