Before reviewing the initiations in more detail, here is a more in-depth look at the company:
As mentioned above, SFIX delivers personalized apparel to customers door steps. It was founded with a focus on women’s apparel. More recently, it has expanded into petite, maternity, men’s and plus apparel, as well as shoes and accessories. Its stylists leverage its data science and apply their own judgment to hand select apparel, shoes and accessories for its clients from a broad selection of merchandise.
The company calls each shipment a "Fix." Clients can choose to schedule automatic shipments or order a Fix on-demand after they fill out a style profile on the website or mobile app. For each Fix, the company charges clients a styling fee that is credited toward items they purchase.
SFIX offer merchandise across multiple price points and styles from over 700 brands, including established and emerging brands, as well as its own private labels, which it calls Exclusive Brands. Many of its brand partners also design and supply items exclusively for its clients.
Finally, as of July 29, 2017, SFIX had 2,194,000 active clients. In 2016 and 2017, its repeat rate was 83% and 86%, respectively.
Based on this morning's initiations, it seems there is not a clear consensus among the analyst community on the stock. As of this writing, we count three bullish initiations vs. four more cautious initiations. On the positive side, RBC Capital initiated SFIX with an Outperform and Piper Jaffray with an Overweight, while both firms put a $29 target on the stock, representing 20% upside from current prices.
However, Goldman Sachs (Neutral) and Stifel (Hold) both assigned priced targets that were lower than the current price, $23 and $22, respectively. In its research note, Stifel commented, "We believe the company can continue to drive strong growth through product enhancements, category expansion, improving data/predictive capabilities, and marketing initiatives. However, at current levels, we believe investors are appropriately discounting the company's growth opportunity..."
Wrapping up, SFIX has been on a nice roll over the past few weeks, but, momentum has somewhat abated as of late. In the near-term, this mixed round of initiations may not help, in terms of re-igniting a meaningful upward push. That said, it's also worth noting that SFIX is scheduled to issue 1Q18 results on December 19, after the close. A strong report could put SFIX back on traders' radars, providing that next catalyst for the stock.