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Why Stitch Fix, Zillow, and Other Consumer Services Stars Sank Today

By Eric Volkman - Mar 4, 2021 at 6:10PM

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Many investors are turning away from remote-business stocks.

What happened

Three consumer services companies that have been investor favorites of late -- fashion-box curator Stitch Fix (SFIX 1.08%) and online real estate portal operators Zillow Group (Z 0.98%)(ZG 1.72%) and Redfin (RDFN -1.15%) -- fell harder than the S&P 500 index on a gloomy Thursday for the market. Stitch Fix ended the day 3.7% lower, Zillow's two classes of stock dropped a respective 8.5% and 10%, and Redfin declined 8.7%.

So what

While Stitch Fix, Zillow, and Redfin aren't necessarily considered coronavirus stocks, they have been popular during the outbreak both on a fundamental and investor-sentiment basis. Over the past year, the performance of all three consumer goods titles have trounced the S&P 500 index.

U.S. currency burning.

Image source: Getty Images.

This stands to reason -- since we've all been staying home, homebuying has been a popular activity. And the attractions of any type of to-your-front-door delivery service -- fashion included -- has had obvious appeal. That's one key reason this consumer goods trio's fundamental performances over the period have been encouraging, for the most part.

Lately, with the notable declines in both coronavirus cases and fatalities, many investors have been turning toward what we can call post-coronavirus stocks and away from outbreak-resilient companies. This might be accelerating on bearish days.

Now what

I don't feel that this sentiment should move investors of Stitch Fix, Zillow, or Redfin. Still, we should keep a wary eye on their fundamentals in the coming quarters to judge their adaptability in a post-pandemic world.

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Stocks Mentioned

Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$41.36 (0.98%) $0.40
Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$40.92 (1.72%) $0.69
Redfin Corporation Stock Quote
Redfin Corporation
$10.31 (-1.15%) $0.12
StitchFix Stock Quote
$8.39 (1.08%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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