SFIX Draws Mixed Analyst Reactions After Revenue Miss

The security sill sports an impressive 140% year-over-year lead, though

Digital Content Manager
Mar 9, 2021 at 10:52 AM
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The shares of Stitch Fix Inc (NASDAQ:SFIX) are freefalling today, down 25.6% at $51.01 at last check, despite the online retailer reporting slightly better-than-expected fiscal second-quarter losses. However, the company also posted a revenue miss, while its sales also missed the mark. The lackluster results are drawing mixed reactions from analysts -- the security received a downgrade from Deutsche Bank to "hold" from "buy," and two price-target cuts, including one from KeyBanc to $75 from $95. It also earned at least three price-target hikes, though, with Truist Securities raising its price objective to $60 from $52.

Digging deeper, Stitch Fix stock has been tumbling down the charts since hitting a Jan. 27 record high of $113.75. Over the past couple of weeks, the equity also slipped below the once-supportive 40-day moving average, with overhead pressure starting to form at the $76 level. Year-over-year, however, the security remains up an impressive 140%.

Analysts were already pessimistic towards the equity coming into today, with nine of the 15 in coverage carrying a tepid "hold" or worse rating, while the remaining six said "buy" or better. Meanwhile, the stock's 12-month consensus target price of $54.13 sits at an 8% premium to current levels.

Short sellers seem to be running for the exits, on the other hand. Short interest fell 55.5% over the last two reporting periods, yet the 8.71 million shares sold short still make up 17.5% of the stock's available float, or nearly three days' worth of pent-up buying power. 

Meanwhile, in the options pits puts are all the rage. This is per the stock's 10-day put/call volume ratio of 1.11 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 86% of readings from the past year. In other words, puts are being picked up at a faster-than-usual pace. 

Drilling down to today's options activity, more than 14,000 puts and 140,000 calls have crossed the tape so far, which is nine times the intraday average. Most popular is the 3/12 50-strike put, followed by the April 50 call, with positions being opened at both.  

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