William Blair downgrades Stitch Fix stock rating on customer growth concerns

William Blair cut its rating on Stitch Fix's stock, moving it from Outperform to Market Perform, citing concerns over customer growth. Analyst Dylan Carden expressed disappointment in the company's guidance for fiscal 2027, which reduced confidence and visibility in its business model. The firm noted that Stitch Fix has struggled to achieve consistent growth in active customers, a factor that has historically bothered investors.

While the management team has improved the business, making it healthier and more dynamic, the stock remains undervalued according to InvestingPro, trading near its 52-week low. The current valuation, which places the shares at $2.82, is close to their cash value. Despite posting an adjusted earnings per share of -$0.02 in fiscal Q4 2026, which exceeded analyst expectations, Stitch Fix's shares still declined.

Management attributed this move to a more cautious outlook for the next fiscal year. Investors are watching closely as the company navigates this new period, with a key risk identified as a prolonged weaker consumer environment.