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Stitch Fix (SFIX) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Stitch Fix (SFIX) closed at $19.09, marking a +0.63% move from the previous day. This change lagged the S&P 500's 1.1% gain on the day. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 1.32%.

Heading into today, shares of the online clothing styling service had lost 29.92% over the past month, lagging the Retail-Wholesale sector's loss of 5.1% and the S&P 500's loss of 5.05% in that time.

SFIX will be looking to display strength as it nears its next earnings release, which is expected to be October 1, 2019. In that report, analysts expect SFIX to post earnings of $0.04 per share. This would mark a year-over-year decline of 76.47%. Meanwhile, our latest consensus estimate is calling for revenue of $432.10 million, up 35.75% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for SFIX. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. SFIX is currently a Zacks Rank #3 (Hold).

Investors should also note SFIX's current valuation metrics, including its Forward P/E ratio of 70.63. Its industry sports an average Forward P/E of 10.23, so we one might conclude that SFIX is trading at a premium comparatively.

Meanwhile, SFIX's PEG ratio is currently 3.14. 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. The Retail - Apparel and Shoes industry currently had an average PEG ratio of 1.07 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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