3 Reasons Stitch Fix Could Keep Surging Higher

Stitch Fix (NASDAQ: SFIX) limped into its fourth-quarter earnings report on Tuesday. The stock had fallen by nearly 50% since it popped on its last earnings report even though there was no major news out on the stock since then.

However, the fourth-quarter earnings report gave bears a reality check, and served notice that the underlying business is still strong. The stock jumped double-digits after hours as the online styling service posted 29% revenue growth to $571.2 million, easily beating both the analyst consensus at $547.9 million and the company's own guidance at $540 million-$550 million.

Even better, the company turned in strong results further down the income statement as well. It posted a record high quarterly gross margin of 46.4%, which it attributed to better-than-expected revenue, improved product margins, and lower transportation costs. Adjusted EBITDA came in at $55.4 million, a 9.7% margin and up from $11.8 million in the quarter a year ago. On the bottom line, the company posted a generally accepted accounting principles (GAAP) profit of $0.19 per share, which crushed estimates calling for a loss of $0.13.

Source Fool.com