The best time to get in is once the business model has proven itself, around the time the “S” curve is putting in the bottom uptrend curve. Before that it’s too much of crap shot.
I think this is coming in October! But I could be wrong! 
Karen
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Shoot, I posted the UK Videos on the wrong thread – thought I was on my SFIX board. -K
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Interesting sales pitch!
Denny Schlesinger
I ordered 3 pairs of shorts from Amazon recently. I had a $50 Amazon gift card, so balance due was only $12. That’s my kind of price. They are fine and fit great.
I hold a few shares of Stitch Fix, but odds are good I’ll never be a member. I’m not a fashion person.
Fool on,
mazske
Active clients were up 17% to 3.1m last quarter [that’s a lot of shoppers] and revenue per client also grew 8% to $467 which accelerated for the 4th straight Q.
I took profits on SFIX on the runup but will probably buy it ahead of earnings.
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I know we don’t focus a lot on the stock price when our focus should be on the business, but I went through the stock price history and found the following:
On June 5, 2018 it hit a low of 18.22
On September 18 it hit a high of 52.44 - up 188% in less than 4 months
On December 24 it hit a low of 16.05 - down 69% in a little over 3 months
On March 12, 2019 it hit a high of 37.72 - up 134% in a little less than 3 months
On May 20 it hit a low of 22 - down 42% in a little over 2 months
On July 1 it hit a high of 32.34 - up 47% in more than 1 month
Today it hit a low of 17.70 - down 45% in less than 3 months
Based only on the stock price, one might assume that the business has swung wildly during this time, but here is what actually happened:
On March 18, 2018, they reported revenue of $295.9M an increase of 24.4% year over year
On June 7, 2018, they reported revenue of $316.7M an increase of 29.2% year over year
On October 1, 2018, they reported revenue of $318.3M an increase of 23.2% year over year
On December 10, 2018, they reported revenue of $366.7M an increase of 23.9% year over year
On March 11, 2019, they reported revenue of $370.3M an increase of 25.1% year over year
On June 5, 2019, they reported revenue of $408.9M an increase of 29.1% year over year
As part of the June 5 release, they guided for revenue growth of 34-37% year over year for this quarter
Looks like steady revenue growth in the 20% range and now we have accelerated revenue growth for the past 3 consecutive quarters and projected into this coming quarter. If I was looking at the stock price of 18, I would assume that revenue growth was slowing. If I was looking at the business results, I would assume the stock price would be near the 52 week high. Both of these are trending in the opposite direction. This is quite unusual when you have the business performance and revenue growth hitting a high point while the stock is nearing a low point. For me this looks like a good time to buy. I bought more call options today and look forward to the earnings on October 1.
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A pretty compelling case, Wouter, thanks for posting.
Why is it compelling when the growth rate is far lower than many of the companies we discuss here and the moat is dubious at best and the market seems so fickle? I get that it might be a candidate for a short term bet that the highly variable stock price is due for a boost, but such short term plays are not really what this board is about.
Tamas, the reason is because SFIX trades at less than 1 times EV, about 20 times cheaper than the stocks you are thinking about.
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Why is it compelling when the growth rate is far lower than many of the companies we discuss here…I get that it might be a candidate for a short term bet that the highly variable stock price is due for a boost…
BINGO, the bolded section is exactly why it’s compelling, good job! I’m open to short term trades now and again when the odds/risks seem in my favor, and I think wouter did a good job of explaining why that may be the case here.
…but such short term plays are not really what this board is about.
I agree with you, the short term nature of this potential trade is not what this board is about, so I won’t post about it again.
But, SFIX, the company, really is not off topic here as it’s forecasting growth in the mid 30% range, and recently increasing, which would fit growth stock status, even here (although on the low end). I of course, see where few here would sell their higher conviction stocks in favor of this trade, but some of us still have some cash available to deploy and may like to take the chance.
It may work out, it may not, but I do appreciate wouter pointing out the trends he saw and letting us each make our own decision.
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wouter…
I like SFIX but I have been in and out precisely at wrong times, losing money each time… I look back and realize that I sell off because I dont have high conviction… and that has to do with decelerating active clients growth… latest quarter active client growth was down to 16% from a 29% growth in the year earlier period…
Ofcourse per client revenue has been steadily growing at high rate resulting in total revenue growth staying between 25% to 30% y/y.
However, I worry that one of these quarter, revenue per client will start to top out and therefore top line revenue growth will decelerate extremely fast… so I cant get long term conviction and therefore cant hold through up and down.
One other thing - you mentioned…
As part of the June 5 release, they guided for revenue growth of 34-37% year over year for this quarter
If you look at the footnotes of their guidance, its clear that this quarter growth raising to mid 30s% due to one extra week this quarter (its a 14 week quarter). If you normalize to 13 weeks, it would be ~28%… in line with latest quarter, not accelerating.
In the past 6 quarters, management has beaten guidance by somewhere between 1% to 4%, so its likely to cross 30% growth this quarter on 13 week normalized basis, its still not accelerating.
Is it cheap? yes, and that’s a good enough reason for the most part… just not working for me.
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The reason the stock has been suffering, I might guess, is that earnings are expected to be lower this year and next year.
Now, that may be because they are investing in the future and that might work out for them, but it’s hard to say from here. AT 1.2x sales I imagine the stock will rally nicely from here if they get it right, but online personal styling is not an easy thing to perfect.
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yes I was thinking that some of these stocks are waning off the growth investors radar… and value guys look for cheapness based on FCF, earnings and asset, rather than revenue growth.
I have experienced painfully long hold on stocks like this before where it doesn’t fully fall into a bucket that excites a set of investors… and remains into a crack… SodaStream was that one for me…
Quick reminder of this thread, as Stitch Fix is announcing their quarterly results tomorrow evening after the market closes.
Here is a link to their IR page announcing the time of the release.
https://investors.stitchfix.com/news-releases/news-release-d…
I did purchase some call options to capitalize in the event of a short squeeze.
volfan84
long SFIX (small position)
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I get that it might be a candidate for a short term bet that the highly variable stock price is due for a boost…
BINGO, the bolded section is exactly why it’s compelling, good job! I’m open to short term trades now and again when the odds/risks seem in my favor, and I think wouter did a good job of explaining why that may be the case here.
…but such short term plays are not really what this board is about.
I agree with you, the short term nature of this potential trade is not what this board is about, so I won’t post about it again.
I have to post the contrary opinion. For me, Stitch Fix is anything but a short term play. I am in this for the next 5-10 years. And, my thesis is that in 10 years, getting your clothes from Stitch Fix will be the normal way to shop. It’s faster, it’s more convenient, most everything fits, you don’t need to flip through the racks to find your size. You don’t need to struggle for a parking spot. The malls are dying and Stitch Fix is the rebirth from the ashes.
As far as how difficult it is to match people to clothes, Stitch Fix is succeeding at this hard task Eric Colson who was a Netflix algorthims guy, I think he may have been the Netflix algorithms guy, joined Stitch Fix and laid the groundwork for their tech that does the heavy lifting. I am part of a Facebook group of Stitch Fix enthusiasts (over 9,000 of them) and so many customers are delighted with the clothes and buying the clothes. It is working. It is working very well.
Then, I am super-impressed with Stitch Fix’s newest features – “Buy more colors”, which I describe as gold mine #1. And “Shop Your Looks” where you can buy coordinating pieces. There is also the extras program, where you can add on socks and underwear, pjs,shapewear etc.
Lastly, note that Stitch Fix sells so much of its inventory AT FULL PRICE.
I’m so in for the long haul. Make it or break it!
Karen
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