Stitch Fix, Inc. (SFIX) PT Lowered to $12 at Stifel

Stifel analyst Scott Devitt lowered the price target on Stitch Fix, Inc. (NASDAQ: SFIX) to $12.00 (from $23.00) while maintaining a Hold rating following results and a reduced outlook.

The analyst commented, "Stitch Fix reported in-line F2Q revenue (+2.5% y/y growth) and adj. EBITDA ahead of expectations (2.0% margin) as the company limited marketing spend as it works to optimize the client onboarding experience. Continued challenges with onboarding and converting of new clients following the launch of Freestyle is resulting in a further reduction in the company’s outlook. Stitch Fix issued F3Q guidance well below expectations and lowered its FY:22 revenue growth guidance to flat to slightly down y/y (+HSD% y/y previously). The company also removed its full year adj. EBITDA outlook (previously 1%-2% margin). F3Q revenue is expected to decline (10)%-(7)% (prior consensus of +3% y/y), and adj. EBITDA margin of (6)%-(5)% is below prior consensus of (2)%. We are reducing our estimates reflecting lower active clients. Visibility into growth remains limited as Stitch Fix has opened the ecosystem with Freestyle. We maintain our Hold rating, our PT falls to $12."

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