At the session high, Stitch Fix stock was up more than 53% as investors rapidly bid the stock up.
It helped that the company turned in a solid quarter. Revenue grew 10% year over year to $490.4 million. That came in almost $10 million ahead of expectations.
However, it was Stitch Fix’s surprise profit of 9 cents a share which has investors so excited, as it came in well ahead of analysts’ expectations for a loss of 20 cents.
It also helps that Stitch Fix stock has a short interest of roughly 20%, which only adds fuel to the post-earnings fire.
Let’s look at the stock to see how much - if any - upside could be left after such a violent rally.
Trading Stitch Fix
The analysts are clearly bullish on Stitch Fix stock after the company’s report. RBC Capital Markets lifted its price target to $64, Goldman Sachs took its target up to $58 and Deutsche Bank raised its price target to $54.
Even the lowest of those targets is higher than the current price, although it is a bit below Tuesday’s high at $54.94.
Still, the fact that more upside is the lowest of the recently revised targets is a positive sign. So is the fact that StitchFix took out its all-time high with Tuesday’s rally.
That came after the stock rallied through the $52.44 mark, although shares are hovering near this level now.
What bulls want to see is two-fold. First, they want to see Stitch Fix hold onto the bulk of its post-earnings gains, preferably holding up over the $46.50 to $49 area. In between that range, at $47.86, is the two-times range extension from the 2020 low to the pre-coronavirus 2020 high.
Second, they want to see the stock get above and stay above those prior highs near $52.50.
If it can do that, then Tuesday’s high becomes the first upside target near $55. Above that and the 261.8% extension is in play at $59.28, along with Goldman Sachs’ target at $58.
Above that and the three-times range comes into play at $66.34, followed by RBC's price target at $68.
If Stitch Fix loses the support outlined above, then look to see how it handles its 10-day moving average on a dip.