One noted stock analyst has scratched Stitch Fix (NASDAQ: SFIX) off his holiday gift list. After market hours on Thursday, it was reported that Goldman Sachs (NYSE: GS) prognosticator Heath Terry downgraded his recommendation on the stock to neutral from the previous buy. Meanwhile, he's maintaining his $58 per-share-price target. It's not that Terry believes the company lacks potential. In fact, he delivered the following more upbeat statement: We continue to believe the opportunity for StitchFix is significant as the apparel category recovers and the share shift to e-commerce that has happened during the pandemic becomes more apparent, operations normalize, incremental revenue streams like Direct Buy outgrow the core, and retail store closures further force consumers online. Image source: Getty Images. The issue is the stock price, which has risen by nearly 50% this month alone. This was on the back of Stitch Fix's Q1 of fiscal 2021 results, in which it blew past analyst expectations with a 10% year-over-year increase in revenue, which is particularly meaningful given the pullback in spending on non-essential items by many consumers. The company also flipped unexpectedly to a net profit under generally accepted accounting principles (GAAP), although it was still in the red on a non-GAAP (adjusted) basis. In the analyst's estimation, while Stitch Fix could have a bright future (particularly within a broad recovery in the apparel sector), in the near term its bottom line will be affected by significant investments it's making in a number of areas. This leads to some uncertainty about the company's profitability, hence the downgrade. In mid-afternoon trading on Friday, Stitch Fix was up marginally, currently trading at $59.32. 10 stocks we like better than Stitch FixWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Stitch Fix wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Stitch Fix. The Motley Fool has a disclosure policy.Source