Forensic Analysis · Retail / Consumer Discretionary · as of Nov 8, 2026
Stitch Fix, Inc. (SFIX)
A forensic read on Stitch Fix, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Distress
Financial health
-1.5
Distress distance
Clean
Earnings quality
5
Forensic signals
-6.3%
ROE
6.4%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Stitch Fix, Inc. earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads -1.5, placing it in the Distress zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-11.1%
FY2026
Return on invested capital.Return on invested capital is -11.1% in the latest fiscal year and rising across FY2024–FY2026 from -87.5%. After-tax operating profit was ($105M) in FY2024 and ($17M) in FY2026, with operating income at -10.0% of revenue in FY2024, -3.1% in FY2025 and -1.6% in FY2026. The capital base behind it grew +28% across FY2024–FY2026, from $120M to $154M, and the return did not fall doing it, so the dollars added over that window earned at least the -87.5% the older base was already earning. $99M of the $154M base at FY2026 is short-term investments (64.1%) — securities held beside cash, which the base keeps because only cash is subtracted from it; they earn the balance sheet's yield, which is not in the operating profit above, so the loss on the operating capital is larger than this rate shows. FY2024's operating profit carried a $19M asset write-down and a $15M restructuring charge that alone took about 22.2 points off that year's return, so about 22.2 of the 76.4-point rise across FY2024–FY2026 is that charge leaving the base year rather than the capital earning more. A non-cash write-down lowers the reported return in the year it lands.
+5.7%/yr
FY2024–FY2026
Share-count dilution.Diluted share count changed +12% over the last 2 years to FY2026 (+5.7%/yr). The count is growing — 120.2M shares in FY2024, 134.2M in FY2026: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~5.7% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2024 has been diluted ~10%.
+12.4%
FY2025→FY2026
Accruals ratio (% of NOA).Net operating assets grew +12.4% relative to their own average in FY2026 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 54% of net operating assets, against an accruals ratio of 12.4%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
3% of rev
FY2026
Stock-based comp load.Stock-based compensation ran 3% of revenue and 234% of free cash flow in FY2026 — about $0.35 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 5.7% a year across FY2024–FY2026, and the rate is falling. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
133% of FCF
FY2026
Shareholder returns.Returned $26M to shareholders (buybacks + dividends) in FY2026 — 133% of free cash flow, but 68% of operating cash flow. Returns run ahead of free cash flow because the business is also funding heavy growth capex (usually debt-financed); the payout itself is covered by operating cash — sustainable as long as that spending is genuine expansion, not upkeep. Counting the $46M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 367%.
Key fundamentals
Latest Revenue$1.35B
Revenue Growth YoY+6.4%
Revenue CAGR (2yr)+0.4%
Net Margin-0.9%
Free Cash Flow$19.8M
Return on Equity-6.3%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Stitch Fix, Inc.'s actual 10-K/10-Q/8-K filings?