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UBS maintained its neutral rating and $5.00 price target on Stitch Fix , Inc. (NASDAQ:SFIX) following the company’s third-quarter results. The online personal styling service reported better-than-expected revenue and earnings per share for the quarter, though InvestingPro data shows the stock has declined nearly 12% over the past week. With a current price of $4.02, the stock trades significantly below analysts’ average target range of $4.50-$6.00.
Stitch Fix also raised its guidance for fiscal year 2025, prompting UBS to increase its sales forecast for fiscal year 2026 by 3%. The research firm attributed the improved performance to enhancements in Stitch Fix’s in-house brands, inventory selection, and trend-aligned styles. According to InvestingPro, the company maintains strong liquidity with a current ratio of 1.8 and holds more cash than debt on its balance sheet, providing flexibility for these operational improvements.
These improvements are driving new client acquisition and boosting existing customer satisfaction, according to UBS. The firm expressed increased optimism for the company’s fourth quarter and fiscal year 2026 performance. While revenue declined 7.75% in the last twelve months, two analysts have recently revised their earnings estimates upward for the upcoming period, as reported by InvestingPro.
Despite the positive developments, UBS maintained its neutral stance, citing the need for more evidence that management initiatives will consistently grow revenue and active clients. The firm indicated that successful execution could drive upward earnings revisions and multiple expansion.
UBS also noted that elevated tariff risk remains a concern, preventing a more positive outlook on Stitch Fix shares. The firm does not anticipate a significant turnaround in the near term.
In other recent news, Stitch Fix reported its financial results for Q3 2025, surpassing expectations with an earnings per share (EPS) of -$0.06, compared to the forecasted -$0.11. The company’s revenue reached $325 million, exceeding the anticipated $315.13 million. Despite a 10.6% decline in active clients, revenue per active client increased by 3.2%, contributing to the overall revenue growth. Additionally, Bernstein maintained its Market Perform rating on Stitch Fix, noting the company’s slight top-line growth in Q3 after years of revenue declines. The firm highlighted the improvement in revenue per active client and average order value as key metrics. Stitch Fix has expanded into new product categories such as athleisure and footwear, which have shown strong performance. The company also provided guidance for Q4 2025, projecting revenue between $298 million and $303 million. Despite current challenges, Stitch Fix management remains confident in its strategy to mitigate tariff impacts without raising prices.
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