Stitch Fix, Inc. (NASDAQ: SFIX)

Sector: Consumer Cyclical Industry: Apparel Retail CIK: 0001576942
Market Cap 676.55 Mn
P/B 3.32
P/E -23.45
P/S 0.52
ROIC (Qtr) -13.23
Div Yield % 0.00
Rev 1y % (Qtr) 7.31
Total Debt (Qtr) 86.95 Mn
Debt/Equity (Qtr) 0.43

About

Stitch Fix, Inc., a technology-driven fashion company, is known by its stock symbol SFIX and operates in the retail apparel industry in the United States and the United Kingdom. Founded in 2

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 114.49M provide 5.08x coverage of short-term debt 22.55M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 530.74M provides 6.10x coverage of total debt 86.95M, indicating robust asset backing and low credit risk.
  • Tangible assets of 530.74M provide exceptional 63.39x coverage of deferred revenue 8.37M, showing strong service capability backing.
  • Robust tangible asset base of 530.74M provides 3.05x coverage of working capital 173.75M, indicating strong operational backing.
  • Tangible assets of 530.74M provide robust 4.45x coverage of other current liabilities 119.13M, indicating strong asset backing.

Bear case

  • Operating cash flow of 22.29M barely covers its investment activities of (29.14M), with a coverage ratio of -0.76, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of 22.29M shows concerning coverage of stock compensation expenses of 55.57M, with a 0.40 ratio indicating potential earnings quality issues.
  • Operating earnings of (28.12M) show weak coverage of depreciation charges of 25.26M, with a -1.11 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 4.98M provides weak coverage of capital expenditures of 17.31M, with a 0.29 ratio suggesting additional external financing needs for growth initiatives.
  • High depreciation of 25.26M relative to operating cash flow of 22.29M, which is 1.13x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Apparel Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TJX Tjx Companies Inc /De/ 175.80 Bn 34.34 2.98 13.19 Bn
2 ROST Ross Stores, Inc. 58.85 Bn 28.21 2.67 5.19 Bn
3 LULU lululemon athletica inc. 25.43 Bn 14.61 2.30 1.76 Bn
4 BURL Burlington Stores, Inc. 18.26 Bn 32.57 1.63 5.94 Bn
5 GAP Gap Inc 10.00 Bn 11.75 0.65 5.52 Bn
6 URBN Urban Outfitters Inc 7.11 Bn 14.53 1.18 1.18 Bn
7 ANF Abercrombie & Fitch Co /De/ 6.17 Bn 11.82 1.19 1.13 Bn
8 BOOT Boot Barn Holdings, Inc. 5.78 Bn 27.75 2.79 0.67 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.24 1.35
EV to Cash from Ops. EV/CFO 29.44 8.18
EV to Debt EV to Debt 7.55 4.33
EV to EBIT EV/EBIT -23.33 -60.97
EV to EBITDA EV/EBITDA -49.50 6.53
EV to Free Cash Flow [EV/FCF] EV/FCF 131.83 22.99
EV to Market Cap EV to Market Cap 0.97 2.06
EV to Revenue EV/Rev 0.51 1.11
Price to Book Value [P/B] P/B 3.32 3.23
Price to Earnings [P/E] P/E -23.45 195.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.88
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.58
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.33
Interest Coverage Interest Coverage 0.00 13.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -20.99 -5.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -16.52 89.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 71.04 13.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 82.60 -16.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 72.23 10.85
EBT Growth (1y) % EBT 1y % (Qtr) 72.23 6.10
EPS Growth (1y) % EPS 1y % (Qtr) 73.17 10.94
FCF Growth (1y) % FCF 1y % (Qtr) 39.06 -129.32
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.78 -1.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.43 1.40
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.44 0.38
Current Ratio Curr Ratio (Qtr) 1.66 1.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.43 1.31
Interest Cover Ratio Interest Cover Ratio 0.00 13.58
Times Interest Earned Times Interest Earned 0.00 13.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.20 2.72
EBIT Margin % EBIT Margin % (Qtr) -2.18 -1.70
EBT Margin % EBT Margin % (Qtr) -2.18 -2.76
Gross Margin % Gross Margin % (Qtr) 44.00 40.52
Net Profit Margin % Net Margin % (Qtr) -2.20 -4.02