Stitch Fix (SFIX) Stock Forecast & Price Target

Stitch Fix Inc. has demonstrated significant improvement in its operating margin, expanding by 950 basis points to -3.6%, surpassing market expectations for a lesser increase. The company is poised for further revenue growth, projecting revenues between $333 million and $338 million for the upcoming quarter, representing a year-over-year increase of 4.4% to 6.0%. Additionally, the average order value (AOV) rose 12% year-over-year in the fourth quarter, marking the eighth consecutive quarter of growth, driven by enhancements in merchandise quality and inventory management.

Stitch Fix Inc reported a fourth quarter adjusted EBITDA margin of 2.8%, reflecting a decline of 20 basis points from the previous year. Additionally, the company's gross margin decreased by 100 basis points year-over-year to 43.6%, falling short of internal forecasts, despite slightly exceeding consensus expectations. Furthermore, the total revenue declined by 2.6% to $311 million, accompanied by a notable decrease in active clients, which fell 7.9% year-over-year to 2.309 million, indicating ongoing challenges in client retention.