Stifel analyst Scott Devitt upgraded Stitch Fix (SFIX) to Buy from Hold with an unchanged price target of $35.

The stock has declined 16% since the beginning of July and now trade at 1.3 times estimated 2020 sales, which offers an attractive entry point, Devitt tells investors in a research note.

The analyst says that despite the slowdown in active client growth, he is confident in management's ability to drive "healthy" average revenue per user growth in the intermediate term by continuing to improve keep rates through stronger personalization, "high-quality" client adds, and "healthy" retention.

Further, the scaling of Stitch Fix's U.K. business represents an additional opportunity for active client growth, contends Devitt.