Expand chart
Data: FactSet; Chart: Naema Ahmed/Axios

Stitch Fix went public just over a year ago at an impressive $1.4 billion valuation. It's held on to that valuation to this day: The company is now worth about $1.5 billion. The problem, as far as the market is concerned, is how it got here from there.

The big picture: Stitch Fix had a relatively small IPO and found it quite hard to sell its vision of a data-first, ultra-personalized clothing store.

  • The company then surged to a $4.8 billion valuation in September as investors started treating it a bit like a SaaS company, looking for recurring earnings from regular shoppers receiving subscription boxes.
  • When Stitch Fix's "active client count" fell short of expectations, the stock promptly plunged. The market decided that Stitch Fix was a bit like Blue Apron, a company that tried and failed to get millions of consumers to get deliveries on a regular schedule.

But, but: There are two big differences between Stitch Fix and Blue Apron. First, Stitch Fix is profitable. And second, CEO Katrina Lake was always hesitant to sell Stitch Fix as a recurring-revenue subscription play. Bloomberg's Sarah Halzack writes:

"The service isn’t about sucking you into a subscription, it's about being one of the main places you go to buy clothes, at whatever intervals you need them. And if Lake is right that its algorithms and stylists can learn to understand just what you want, it could steal more market share from established retail chains."

Be smart: Stitch Fix the company hasn't been nearly as volatile as the stock price might have you believe. There was a mini-bubble in Stitch Fix shares, which burst, but the underlying company is still delivering on its value proposition. If you've shopped there before and you trust it to know what fits you and what you like, then the next time you want to buy clothes, there's a good chance you'll shop there again.

Go deeper

43 mins ago - Technology

TikTok to pull out of Hong Kong

Illustration: Aïda Amer/Axios

TikTok said Monday night that it would pull its social video platform out of the Google and Apple app stores in Hong Kong amid a restrictive new law that went into effect last week.

Why it matters: TikTok's move comes as many large tech companies say they are still evaluating how to respond to the Hong Kong law.

3 hours ago - World

Ethiopia's Nobel Peace laureate cracks down on ethnic violence

The image of a Nobel Peace laureate in military fatigues encapsulates the moment in which Ethiopia finds itself — on the verge of a transition to democracy, a descent into violence or, perhaps, a precarious combination of the two.

Driving the news: At least 166 people were killed after an iconic musician, Haacaaluu Hundeessaa, was murdered last Monday in Addis Ababa, the capital. Prime Minister Abiy Ahmed responded to the violence by sending in troops and shutting off the internet. High-profile opposition leaders were arrested, along with some 2,300 others.

Updated 5 hours ago - Health

Atlanta Mayor Keisha Lance Bottoms tests positive for coronavirus

Atlanta Mayor Keisha Lance Bottoms said on Monday that she has tested positive for the coronavirus after displaying no symptoms.

Why it matters: Bottoms, one of several Black women on the shortlist to be Joe Biden's running mate, has risen to national prominence in recent months as part of mass protests over racism and police brutality — driven in part by the killing of Rayshard Brooks by Atlanta police.