What Can We Learn From Stitch Fix Inc. (SFIX)’s Valuation Ratios?

Stitch Fix Inc. (NASDAQ:SFIX) finished Thursday with an addition of $1.51 to close at $36.91, an upside of 4.27 percent. An average of 2,370,540 shares of common stock have been traded in the last five days. There was a fall of -$3.04 in the past week. The last 20 days have seen an average of 4,365,395 shares traded, while the 50-day average volume stands at 2,526,756.

SFIX stock has decreased by -4.58% in the last month. The company shares reached their 1-month lowest point of $33.20 on 09/15/21. With the stock rallying to its 52-week high on 01/27/21, shares of the company touched a low of $28.37 and a high of $113.76 in 52 weeks. In spite of this, the price is down -67.55% from the 52-week high.

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Insider Transactions

15 days have passed since Stitch Fix Inc. (SFIX) last reported insider trading activity. Smith Mike C., who is President and COO, most recently acquired $20,000 shares at $40.73 per share on Sep 23. In this transaction, the insider spent $814,667. Chief Executive Officer, Lake Katrina, disposed of 38,409 shares at a price of $34.43 on Sep 17. The insider now owns more than $1,322,305 worth of shares. Prior to that, Chief Executive Officer Lake Katrina went on to Sale 33,359 shares at $33.91 each on Sep 16. An amount of $1,131,066 was transacted.

Valuation Metrics

Stitch Fix Inc. (SFIX) has a trailing price-to-earnings (P/E) ratio of 21.00 for the broader industry and 20.37 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Stitch Fix Inc.’s PE ratio has ranged between 309.93 and 42.87. The stock’s beta is 1.95. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.85, the price-to-book (PB) ratio at 8.60.

The quick ratio of Stitch Fix Inc. for the three months ended July 30 was 1.40, and the current ratio was 2.30, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 For the recent quarter ending July 30. On the profitability front, the trailing 12-month gross margin is 45.10% against a 5-year average of 44.4%. Stitch Fix Inc.’s EBITDA margin for the year ending July 30 is -1.63%, while its operating margin for the same period stands at -3.00%. Its gross profit as reported stood at $947.64 million compared to revenue of $2.1 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Stitch Fix Inc.’s return on assets was -1.00%, compared to 1.1% over the last five years. In the past year, the return on investment has been -5.40%, and the 5-year average is 2.5%. Meanwhile, the return on equity (ROE) for the past 12 months has been -2.00% and the 5-year average holds at 1.9%. For the broader industry, ROE averaged 10.33 over the past year.

Earnings Surprise

For the three-month period that ended July 30, Stitch Fix Inc. had $101.55 million in cash. The analyst consensus anticipated Stitch Fix Inc.’s latest quarter earnings to come in at -$0.13 per share, but it turned out to be $0.19, a 246.20% surprise. For the recent quarter, EBITDA amounted to $28.74 million. Shareholders own equity worth $108.73 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Stitch Fix Inc. (SFIX) price momentum. RSI 9-day as of the close on 07 October was 42.76%, suggesting the stock is Neutral, with historical volatility in this time frame at 57.49%.

As of today, SFIX’s price is $37.55 -7.61% or -$3.04 from its 5-day moving average. SFIX is currently trading -5.12% lower than its 20-day SMA and -15.86% lower than its 100-day SMA. However, the stock’s current price level is -34.79% below the SMA50 and -47.90% below the SMA200.

The stochastic %K and %D were 21.31% and 31.59%, respectively, and the average true range (ATR) was 2.53. With the 14-day stochastic at 24.49% and the average true range at 2.48, the RSI (14) stands at 43.05%. The stock has reached -2.92 on the 9-day MACD Oscillator while the 14-day reading was at -3.10.

Analyst Ratings

Wedbush launched coverage on Stitch Fix Inc. (NASDAQ: SFIX) in its analyst report released on October 05, 2021. The firm assigned the stock a a Neutral rating.The consensus rating for Stitch Fix Inc. (SFIX) among analysts is Hold. According to current brokerage recommendations, 3 brokerage firms advise that investors sell SFIX, while 7 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 6 others rate it as a “buy”.

What is SFIX’s price target for the next 12 months?

Analysts predict a range of price targets between $29.00 and $70.00, with a median target of $46.00. Taking a look at these predictions, the average price target given by analysts for Stitch Fix Inc. (SFIX) stock is $49.60.


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