Stitch Fix, Inc. (SFIX) PT Cut to $26 at Stifel as EBITDA Guidance Drops to 0 at Low End of Range

Stifel analyst Scott Devitt lowered the price target on Stitch Fix, Inc. (NASDAQ: SFIX) to $26.00 (from $32.00) after the company reported that Revenue increased 22.0% y/y to $451.8mm, in line with the company’s guided range of $447-$455mm. Active clients increased 17.0% y/y (up 1.4% q/q) to 3.5mm, matching the Street’s estimate as the company added roughly 49K clients in F2Q. F3Q guidance of $465-$475mm (+15% y/y growth), fell substantially below the Street’s $506mm (+24% y/y growth) estimate.

The analyst reiterated the Buy rating, stating "The company experienced lower than expected average order value during the holiday season partially attributable to a heighted promotional period across apparel retail as well as a mix shift focused on expanding the company’s lower priced offerings". "The company’s conservative guidance also reflects recent macro uncertainty and a potential negative impact from the ongoing coronavirus outbreak, though the company has not seen a material impact from the virus to date. Stitch Fix also lowered its FY:20 adj. EBITDA outlook, primarily reflecting the deceleration in revenue growth. The company now expects adj. EBITDA in the range of $0mm to $10mm, below the Street’s $28mm prior forecast and our $31mm estimate".

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