Stitch Fix (NASDAQ:SFIX) stock gained over 24% in the extended trading session yesterday following the release of better-than-expected third-quarter Fiscal 2024 results. Furthermore, the company provided Q4 and full-year revenue guidance that surpassed analysts’ forecasts.
SFIX is an online personal styling service that delivers curated fashion items to customers based on their preferences and feedback.
SFIX: Q3 Highlights
The company reported a loss of $0.18 per share, narrower than the consensus estimate of a loss of $0.24 per share. However, the figure compares favorably with a loss of $0.19 in the prior-year quarter. Meanwhile, SFIX delivered revenues of $323 million in Q3, down 16% year-over-year but above the Street’s forecast of $306 million.
Moving to key metrics, total active clients declined by 20% year-on-year to 2.63 million. At the same time, net revenue per active client was $525, reflecting an increase of 2% year-over-year.
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bearish on SFIX are concerned about the continuous decline in active clients. It should be noted that Q3 marks the tenth consecutive quarter of decline in its customer base.
Q4 and Fiscal 2024 Outlook
For FY24, SFIX expects revenue to come between $1.33 billion and $1.34 billion. The expected range remains above the consensus estimate of $1.31 billion. Also, the company forecasts that adjusted EBITDA will be in the range of $25 to $30 million.
For the fourth quarter, Stitch Fix anticipates that revenue will fall between $312 million and $322 million, compared with the Street’s estimates of $307 million. The company expects adjusted EBITDA to come in the range of $5 million and $10 million.
Is SFIX a Good Stock to Buy?
Overall, Stitch Fix has a Moderate Sell consensus rating based on five Hold and two Sell recommendations. The analysts’ average price target on SFIX stock of $3.08 implies an upside potential of 15.4% from current levels. Shares of the company have declined by 31% in the past six months.
