Tuesday, Mizuho initiated coverage on Stitch Fix , Inc. (NASDAQ:SFIX) with an Underperform rating and a price target of $2. The firm cited concerns over the company's ability to turn around its core business amid a challenging macroeconomic environment. The new CEO, Matt Baer, and his team's digital-first approach and recent initiatives have shown some early signs of progress.
Despite these new efforts, Mizuho expressed caution, noting that a sustainable improvement in Stitch Fix's performance is likely to take time. The analyst pointed out that the company's revised fiscal year 2024 guidance, which ends in July, suggests that business conditions have worsened. This could lead to continued pressure on the company's performance into the next year.
Mizuho's analysis highlighted the importance of stabilizing active customer counts before adopting a more positive outlook on the company. The firm's price target indicates that there is over a 10% downside potential for Stitch Fix's stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.