Stitch Fix ( NASDAQ: SFIX ) stock slid on Tuesday as JP Morgan took its rating from Neutral to Underweight.
The downgrade cited macro concerns and the uncertain trajectory of the online retailer’s shift to its Freestyle business initiative. While Stitch Fix ( SFIX ) management has heightened focus on the more personalized and flexible style curation business, CEO Elizabeth Spaulding recently told analysts that the company continues to “see softness in Freestyle relative to what we would have anticipated.”
Additionally, the fashion-focused company will struggle to find growth while cutting back on costs and advertising, in JP Morgan’s view.
Shares slid 8.28% on Tuesday, bringing year to date declines to more than 85% . Amid the stock’s steep decline, short interest has climbed to 19.26%, per Seeking Alpha data.
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Stitch Fix cut to Sell at JP Morgan amid business transition