EARN25

Stitch Fix Stock Rips Higher on Huge Q3 Report

Some options traders could be sitting on big SFIX paper profits

Jun 8, 2018 at 9:42 AM
facebook X logo linkedin


AI-driven fashion expert Stitch Fix Inc (NASDAQ:SFIX) blew Wall Street away last night with its fiscal third-quarter results. Earnings for the period topped expectations thanks to a 29% year-over-year increase in sales. The company also said the number of subscribers grew by 30% to roughly 2.7 million clients, and that it is launching a shopping platform specifically for children.

Brokerage firm RBC didn't try to hide its enthusiasm following the report, saying "Stitch Fix is revolutionizing fashion" while maintaining its $30 price target. Stifel also weighed in with a price-target increase to $26 from $25. This may not be the last round of bull notes we see for SFIX, since half the analysts in coverage still have just "hold" ratings.

As for options activity, most traders had been focusing on long calls. The front-month June 19 call saw the largest increase in open interest during the past 10 days, where data shows mostly buy-to-open activity. Meanwhile, more ambitious bulls were buying the June 27 call.

The stock is trading up 6.8% at $21, as it tries to surpass the 50-day moving average for the first time since mid-May. Shortly after going public back in November, Stitch Fix stock traded as high as $30.07 in late December, but has struggled to break out in 2018. An unwinding of short interest could help, however, as a whopping 21% of the float is sold short.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!