Latest news with #SFIX
Yahoo
22-05-2025
- Business
- Yahoo
1 Surging Stock to Consider Right Now and 2 to Approach with Caution
Great things are happening to the stocks in this article. They're all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase. However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here is one stock with lasting competitive advantages and two not so much. One-Month Return: +34.8% One of the original subscription box companies, Stitch Fix (NASDAQ:SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers. Why Is SFIX Risky? Number of active clients has disappointed over the past two years, indicating weak demand for its offerings Poor expense management has led to operating losses Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 23.9% annually, worse than its revenue At $4.11 per share, Stitch Fix trades at 14.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than SFIX. One-Month Return: +9.7% Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE:NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals. Why Should You Sell NVST? Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn't resonate with customers Earnings per share fell by 13.9% annually over the last five years while its revenue was flat, showing each sale was less profitable Eroding returns on capital from an already low base indicate that management's recent investments are destroying value Envista's stock price of $16.64 implies a valuation ratio of 16.3x forward P/E. Check out our free in-depth research report to learn more about why NVST doesn't pass our bar. One-Month Return: +17.6% Founded in Chennai, India in 2010 with the idea of creating a 'fresh' helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium-sized businesses. Why Are We Positive On FRSH? Customers view its software as mission-critical to their operations as its ARR has averaged 20.2% growth over the last year Superior software functionality and low servicing costs lead to a top-tier gross margin of 84.4% Operating margin expanded by 9.2 percentage points over the last year as it scaled and became more efficient Freshworks is trading at $14.36 per share, or 5.2x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
Yahoo
08-05-2025
- Business
- Yahoo
3 Reasons SFIX is Risky and 1 Stock to Buy Instead
Over the past six months, Stitch Fix's shares (currently trading at $3.33) have posted a disappointing 11.9% loss while the S&P 500 was down 6.2%. This may have investors wondering how to approach the situation. Is there a buying opportunity in Stitch Fix, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team's opinion, it's free. Even with the cheaper entry price, we're swiping left on Stitch Fix for now. Here are three reasons why you should be careful with SFIX and a stock we'd rather own. Revenue growth can be broken down into changes in price and volume (for companies like Stitch Fix, our preferred volume metric is active clients). While both are important, the latter is the most critical to analyze because prices have a ceiling. Stitch Fix's active clients came in at 2.37 million in the latest quarter, and over the last two years, averaged 17.4% year-on-year declines. This performance was underwhelming and implies there may be increasing competition or market saturation. It also suggests Stitch Fix might have to lower prices or invest in product improvements to grow, factors that can hinder near-term profitability. Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals. Stitch Fix's operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging negative 7.2% over the last two years. Unprofitable consumer discretionary companies that fail to improve their losses or grow sales rapidly deserve extra scrutiny. For the time being, it's unclear if Stitch Fix's business model is sustainable. We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Sadly for Stitch Fix, its EPS declined by 31.9% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand. We cheer for all companies serving everyday consumers, but in the case of Stitch Fix, we'll be cheering from the sidelines. Following the recent decline, the stock trades at 11.8× forward EV-to-EBITDA (or $3.33 per share). This multiple tells us a lot of good news is priced in - we think there are better investment opportunities out there. We'd suggest looking at the Amazon and PayPal of Latin America. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today.
Yahoo
07-05-2025
- Business
- Yahoo
2 Volatile Stocks on Our Watchlist and 1 to Keep Off Your Radar
A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren't prepared. These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here are two volatile stocks that could reward patient investors and one best left to the gamblers. One Stock to Sell: Stitch Fix (SFIX) Rolling One-Year Beta: 2.73 One of the original subscription box companies, Stitch Fix (NASDAQ:SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers. Why Should You Sell SFIX? Demand for its offerings was relatively low as its number of active clients has underwhelmed Poor expense management has led to operating losses Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable Stitch Fix is trading at $3.28 per share, or 11.6x forward EV-to-EBITDA. If you're considering SFIX for your portfolio, see our FREE research report to learn more. Two Stocks to Watch: Deckers (DECK) Rolling One-Year Beta: 1.41 Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands. Why Does DECK Stand Out? Brand and reputation resonate with consumers, as seen in its above-market 18% annual sales growth over the last five years Free cash flow margin is on track to jump by 2.9 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends Returns on capital are growing as management capitalizes on its market opportunities At $118.39 per share, Deckers trades at 18.4x forward P/E. Is now the right time to buy? Find out in our full research report, it's free. Planet Labs (PL) Rolling One-Year Beta: 2.79 Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE:PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change. Why Is PL a Top Pick?
Yahoo
12-03-2025
- Business
- Yahoo
Stitch Fix Inc (SFIX) Q2 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth
Revenue: $312.1 million, down 5.5% year over year and 2% quarter over quarter. Adjusted EBITDA: $15.9 million, representing a 5.1% margin, up 380 basis points year over year. Contribution Margin: 33%, marking the fourth consecutive quarter above 30%. Gross Margin: 44.5%, up 110 basis points year over year. Active Clients: 2.4 million, down 16% year over year and 2.6% quarter over quarter. Revenue per Active Client (RPAC): $537, up 4% year over year. Advertising Expense: 7.8% of revenue, down 160 basis points quarter over quarter. Net Inventory: $109.6 million, down 13% year over year and 8% quarter over quarter. Free Cash Flow: Negative $19 million for Q2. Cash and Investments: $230 million with no debt. Annual Revenue Guidance: Between $1.225 billion and $1.240 billion. Annual Adjusted EBITDA Guidance: Between $40 million and $47 million. Q3 Revenue Guidance: Between $311 million and $316 million. Q3 Adjusted EBITDA Guidance: Between $7 million and $10 million. Full Year Gross Margin Guidance: Approximately 44% to 45%. Warning! GuruFocus has detected 3 Warning Sign with SFIX. Release Date: March 11, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Stitch Fix Inc (NASDAQ:SFIX) exceeded expectations in Q2 with revenue of $312.1 million and adjusted EBITDA of $15.9 million. The company achieved a 710 basis point sequential improvement in year-over-year revenue comps and a contribution margin of 33%, marking the fourth consecutive quarter above 30%. Both the Men's business and Freestyle channel returned to year-over-year revenue growth, indicating positive momentum. Investments in improving the quality of the assortment and inventory management have led to a 9% year-over-year increase in Average Order Value (AOV). The company raised its annual guidance for fiscal 2025, reflecting confidence in continued performance improvements and strategic investments. Net revenue for Q2 was down 5.5% year over year and 2% quarter over quarter, indicating ongoing challenges in achieving consistent revenue growth. Active clients ended the quarter at 2.4 million, down 16% year over year and 2.6% quarter over quarter, highlighting difficulties in client retention and acquisition. Free cash flow was negative $19 million in Q2, attributed to timing of working capital requirements related to inventory purchases. The company anticipates continued active client declines into FY26, which could impact future revenue growth. Despite improvements, the company faces potential challenges from tariffs and macroeconomic uncertainties, which could affect future performance. Q: Can you provide insights into your customer demographics and how they relate to current consumer sentiment? Additionally, do you need Freestyle to expand your total addressable market (TAM)? A: Our clients span various household income levels, seeking convenience and style advice. The Stitch Fix value proposition resonates broadly, addressing shopping stress and dissatisfaction. Freestyle complements our Fix model, enhancing client engagement and wallet share, thus expanding our TAM. Q: How are tariffs impacting your pricing strategy, and what categories are performing well? A: We have a tariff mitigation strategy to protect profitability, leveraging our diverse brand portfolio. Our private brands and national brands are strategically managed to mitigate tariff impacts. Categories like sneakers and accessories are performing well, and we're expanding non-apparel offerings. Q: What drove the gross margin expansion in Q2, and what are your expectations for Q3? A: Q2 gross margin expansion was due to typical seasonality and strong AOV performance. We expect Q3 gross margins to remain within the 44% to 45% range, consistent with our full-year guidance. Q: Can you provide more color on quarter-to-date trends for February and March? A: We're encouraged by the momentum, with strong performance in February and March. Our reimagined client experience and strategic initiatives have exceeded expectations, driving growth in Men's and Freestyle channels and improving trends in Women's and Fix channels. Q: How does AOV growth impact future revenue growth, and what is your strategy for sustainable growth? A: AOV has been strong, but comping against it presents challenges. We aim for growth through both existing client engagement and active client growth. Sustainable long-term growth will come from balancing these areas. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
