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Stitch Fix Stock Pops After Shareholder Raises Stake

Year-over-year, SFIX has shed more than 74%

Digital Content Manager
Dec 23, 2021 at 10:05 AM
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E-tailer and online personal styling service Stitch Fix Inc (NASDAQ:SFIX) is up 2% to trade at $18.63 this morning, following news that Working Capital Advisors purchased an additional 3.4 million shares of the company. This makes the shareholder the owner of a total of 10.6 million shares.

Digging deeper, Stitch Fix stock has had a few rough months on the charts. The equity has been trending lower since running into a ceiling at the $65 level in June. In addition, the declining 20-day moving average has been pressuring the shares since November, sending them towards annual lows last week. Year-over-year, SFIX has shed 74.5%. 

Analysts are bearish towards SFIX, with 11 of the 14 in coverage carrying a tepid "hold" or worse, while three say "strong buy." Meanwhile, the 12-month consensus target price of $25 is a 36.8% premium to current levels. 

Short sellers have been hitting the exits of late. Short interest fell 11.2% over the last two reporting periods, though the 2.61 million shares sold short still account for 11.4% of the security's available float.

Now could be a good time to weigh in on the stock's next move with options. Stitch Fix stock's Schaeffer's Volatility Index (SVI) of 64% stands higher than just 8% of readings from the past year. This suggests options traders are pricing in relatively low volatility expectations at the moment. 

It's also worth noting that the security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 89 out of 100, indicating SFIX has exceeded option traders' volatility expectations during the last 12 months.

 

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