Stitch Fix (SFIX) stock exploded higher by 45% on Wednesday following the company’s earnings results on Tuesday evening.
The online retail business reported earnings per share that were $0.09 better than analyst expectations of $-0.05. That earnings per share number was the first profitable showing for Stitch Fix since September 2021.
The company also reported revenue from sales of $318 million, beating analysts’ target by 4%, better than last quarter’s revenue beat of 3.76%.
Furthermore, Stitch Fix’s management guided the company’s revenue higher for its next quarter’s operations and for fiscal 2025. Investors should note that the company is still posting an average decline of more than 15% per quarter over the last 11 quarter’s operations.
The 45% jump in share price shot SFIX shares to a closing price of $6.64 and solidifies the stock’s move into a long-term bull market trend.
From a short-term perspective, investors should expect that Stitch Fix shares are likely to retrace some of today’s gains.
The stock posted intraday highs of $7.00, a round number for stocks trading under $10.
Secondly, shares of Stitch Fix are registering an overbought reading from their RSI indicator. This suggests that the stock will take a healthy “rest” before advancing higher.
Investors looking to take a position in this potential long-term turnaround may consider eyeing the $6.00 price as an entry on any pullback.
Stitch Fix shares remain a bullish turnaround candidate with a price target of $10.00.
