Stitch Fix founder and CEO Katrina Lake has plenty to celebrate. On Friday morning, her online fashion service--which pairs an army of stylists with troves of data to deliver garments to subscribers in a monthly box--began trading on the Nasdaq stock exchange under the ticker SFIX.

The company, which generates nearly $1 billion in annual revenue, raised $120 million in its IPO on Thursday. That valued Stitch Fix at an impressive $1.2 billion, or four times what it was worth in 2014 when the company last raised venture capital. In the early hours of trading, shares popped to $16.90 apiece, from the opening price of $15.

But there's an elephant in the room--an Amazonian one--and it has some investors bearish on the future of Stitch Fix. 

"The Achilles heel for subscription companies is customer churn," says Brendan Witcher, an e-commerce analyst with research firm Forrester. To his point, companies that sell goods or services on a monthly revenue model--including Birchbox and Rent the Runway--typically struggle to attract and retain users over time. When the subscription meal-kit service Blue Apron went public in June, investors gawked at the massive $144 million the company said it spent on marketing in 2016 alone. Although Stitch Fix has managed to generate profits, earning $33 million last year on revenue of $730 million, the company acknowledges that it may need to ramp up spending to acquire new customers--and soon. In its S-1 filing with the Securities and Exchange Commission, Stitch Fix listed "cost-effectively acquiring new customers" as a primary risk factor.

Meanwhile, competition is heating up. Earlier this year, e-commerce giant Amazon launched its own try-before-you-buy service, called Amazon Wardrobe, offering discounts on purchases of more than $200. (With Stitch Fix, customers earn a 25 percent discount for keeping all five items in the box.) Other competitors include San Francisco-based Le Tote and MM.LaFleur, a 2017 Inc. 5000 honoree.

Yet Amazon may be uniquely positioned for success, inasmuch as it isn't likely to face the same customer churn problem. "They [Amazon] have the customer base for it, and they have the customers that trust Amazon," notes Forrester's Witcher. "Will they be successful with Wardrobe? Of course."

That doesn't necessarily spell doom for Stitch Fix, or for other direct-to-consumer e-commerce companies (i.e., Warby Parker) that are looking to go public in the not-too-distant future. But it does mean that the path forward could be more expensive. 

That, in part, is why shares of the company were priced below the anticipated $18-to-$20 range on Thursday night. Investors reportedly demanded a discount amid concerns over profitability and the transparency of financial metrics, according to CNBC.