Stitch Fix Surges After William Blair Upgrade: Retail Still On The Fence

The research firm upgraded its rating to 'Outperform' and said it sees steady customer growth through 2026.

William Blair on Monday upgraded Stitch Fix (SFIX) shares to 'Outperform' from 'Market Perform,' sending the stock up nearly 9% during regular trading before giving back some gains after hours.

Stitch Fix is moving out of the second phase of its restructuring strategy and into a growth phase, aided by a return to revenue growth in the April quarter, which was a year ahead of prior guidance, the research firm said in an investor note.

William Blair sees a "longer-term value proposition that can sustain a new inevitable return to active client growth looking further into 2026."

Stitch Fix, which offers personalized clothing and accessories, appointed Matt Baer, formerly Macy's chief customer and digital officer, as its new CEO in mid-2023.

Under Baer, the company has reduced costs by exiting the UK and shutting down select facilities, refreshed its brand, and launched new tools to strengthen client-stylist engagement.

Last month, the company joined several Russell Growth Indices, highlighting its visibility in the market for the company's stock.

Before the latest upgrade, five out of the six analysts covering the stock rated it 'hold,' and one rated it 'sell,' according to Koyfin data. Their average price target is $5.06.

On Stocktwits, the retail sentiment held in the 'neutral' zone, unchanged from a week ago. SFIX shares are down 1.4% year-to-date, even after the gains on Monday.

In June, the company reported better-than-expected third-quarter results and raised its forecast for the financial year ending this month, signaling business momentum.

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