Fact based stock research
Stitch Fix (NasdaqGS:SFIX)

US8608971078

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Stitch Fix stock research in summary

stitchfix.com

ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), Stitch Fix (Internet Retail, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Stitch Fix are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 70), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on Stitch Fix's financial characteristics. As the company Stitch Fix's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 33) and low growth (Obermatt Growth Rank of 31), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 70) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	33
Growth Rank	31
Safety Rank	70
Combined Rank	44

Country	USA
Industry	Internet Retail
Index	Diversity USA, NASDAQ
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Stitch Fix

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	39	32	33
GROWTH
GROWTH	68	17	87	31
SAFETY
SAFETY	49	80	80	70
SENTIMENT
SENTIMENT	n/a	52	72	^new
360° VIEW
360° VIEW	n/a	22	10	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 3-Aug-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Stitch Fix is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	39	32	33
GROWTH
GROWTH	68	17	87	31
SAFETY
SAFETY	49	80	80	70
COMBINED
COMBINED	46	70	70	44

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of Stitch Fix the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Stitch Fix shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Stitch Fix. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than 56% of comparable companies, indicating a good value concerning to Stitch Fix's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 1, meaning that dividends are expected to be lower than for 99% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 61% of alternatives (only 39% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 61% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Stitch Fix's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Stitch Fix could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Stitch Fix looks like an expensive investment today. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	67	58	67	56
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	24	10	39	39
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	28	40	42	39
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	26	39	32	33

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Stitch Fix; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Stitch Fix shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Stitch Fix. Profit Growth has a rank of 77, which means that currently professionals expect the company to grow its profits more than 77% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 55 (above 55% of alternative investments). But Sales Growth has a below the median rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Capital Growth also has a lower rank of 10. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Stitch Fix. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	49	59	43	10
PROFIT GROWTH
PROFIT GROWTH	n/a	1	73	77
CAPITAL GROWTH
CAPITAL GROWTH	n/a	50	84	10
STOCK RETURNS
STOCK RETURNS	57	7	77	55
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	68	17	87	31

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Stitch Fix.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Stitch Fix has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Stitch Fix is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Stitch Fix.Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 71, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Stitch Fix has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Stitch Fix more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	46	100	100	100
REFINANCING
REFINANCING	66	55	75	71
LIQUIDITY
LIQUIDITY	19	3	3	1
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	49	80	80	70

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Stitch Fix and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	17	3	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	72	98	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	70	72	^new
MARKET PULSE
MARKET PULSE	n/a	37	59	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	52	72	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Stitch Fix.
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