Shares of Stitch Fix (SFIX) are rising after the online personal styling service launched an offering for kids and an analyst started coverage of the stock with an Overweight rating.

STITCH FIX KIDS: On Monday, Stitch Fix announced the launch of its kids offering and allowed parents to sign up to request a Fix for their child. Stitch Fix Kids, which does not require a subscription or membership, offers clothing and accessories available in sizes 2T-14 with average prices ranging from $10 to $35 per item. Kids Fixes include eight to 12 items and at launch, more than 50 brands are offered, including Under Armour (UA, UAA), Nike (NKE), TOMS, DL1961, Hanna Andersson, Threads 4 Thought, Joules, Sovereign Code, Tailor Vintage and more. Stitch Fix also introduced its own exclusive brand, Rumi + Ryder, a collection of everyday playwear and essentials for boys and girls. Parents can manage their kid's profile directly from their own, the company said. New and existing clients can fill out a Style Profile with their child, and pick the date to receive their first Kids Fix. Clients pay a $20 styling fee, which is applied towards any item purchased in their child's Fix. Clients buy what they like and return the rest, with free shipping both ways. If all items are kept, the client receives a 25% discount, it added.

EXECUTIVE COMMENTARY: "At Stitch Fix, our goal has always been to help our clients discover products and styles they love," CEO Katrina Lake said. "Now, we want to inspire the same confidence in our littlest clients. Stitch Fix Kids is a fun and engaging way for kids to find clothes they love and feel their best in while saving parents time."

ANALYST VIEW: On Monday, KeyBanc Capital Markets analyst Edward Yruma initiated Stitch Fix with an Overweight rating and a $38 price target. The analyst said in a research note that he believes the company's unique combination of data-driven human curation will enable it to gain share in the $340B soft lines market. The use of data is a significant advantage to the traditional retail competitive set and allows Stitch Fix to develop a scalable, yet highly human, recommendation model, Yruma said. He sees share gains continuing in the core women's market and expects men's, plus and kids to assist in further accelerating growth. Yruma separately downgraded Nordstrom (JWN) and Urban Outfitters (URBN) to Sector Weight.

PRICE ACTION: Stitch Fix rose 10.3% to $34.31 in morning trading.