Stitch Fix: Too Prudent For Its Own Good
- Stitch Fix disappointed the market with a big cut to FY22 guidance.
- The company cut back on marketing, while fixing an onboarding issue with their new Freestyle product.
- The stock is far too cheap at less than 1x FY22 sales targets despite the potential to return to 10%+ growth.
- This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »
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Disclosure: Long SFIX. Please review the disclaimer page for more details.
Update - Jan. 6
The stock is so cheap that a $150 million share buybacks makes sense. The company has a cash balance of $400 million, but Stitch Fix is best focused on investing in growth.
- Stitch Fix announcing a share repurchase program to buyback up to $150M is up in pre-market trading after
- As of October 30, 2021, the company had 83,193,536 shares of Class A common stock and 25,601,420 shares of Class B common stock outstanding.