Even under very favorable assumptions, Under Armor stock appears to be significantly overvalued. The company has also accumulated significant debt over the past three years, which adds to its riskiness in the event of an economic downturn. I would recommend staying away from the stock and will be looking at exiting my position.
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Is Under Armour overvalued?
Under Armour is currently undervalued according to the same model. However, from my point of view, the risk of investing in Under Armour is much higher than investing in its competitors Nike or Adidas. For this reason, I would recommend to underweight the Under Armour position in an investment portfolio.
Is Under Armour worth investing?
What is Under Armour worth? Good news, investors! Under Armour is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $17.06, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low.
What is happening with Under Armour?
Under Armour reported an unexpected loss and sales below estimates as the company grappled with global supply chain challenges and Covid lockdowns in China. The athletic apparel retailer's stock fell as it also issued profit guidance that came in below Wall Street estimates.
Why has Under Armour stock fallen?
However, supply chain disruptions and rising costs have weighed on profitability in recent quarters. Shares plunged earlier this month after Under Armour reported an unexpected loss for the period ending on March 31.
Is under Armour a buy right now?
Under Armour still isn't terribly popular on the Street—just over half of analysts tracked by FactSet rate it a Buy or the equivalent. Yet the average analyst price target of $25.50 is more than 50% above where the shares trade today.
What is the future of under Armour?
The athletic apparel company is benefiting from the ongoing turnaround as seen from its record financials in 2021. Its full-year 2021 revenues grew 27% year-over-year (y-o-y) to $5.7 billion and adjusted earnings grew to 85 cents from a loss of 26 cents in 2020.
Why is Under Armour successful?
Under Armour's original HeatGear and ColdGear are resonators. The biggest reason why it's a resonator is because most of their original sales and contracts came as a result of word-of-mouth. Players loved the products so much they would tell those around them who would also benefit by wearing Under Armour.
Who is Under Armour owned by?
Kevin Audette PlankKevin Audette Plank (born August 13, 1972) is an American billionaire businessman and philanthropist. Plank is the founder and executive chairman of Under Armour, a manufacturer of sportswear, footwear and accessories, based in Baltimore, Maryland. As of October 2021, his net worth was estimated at US$1.8 billion.
Is Under Armour a good company?
Labour conditions. On the labour front, Under Armour is rated 'Not Good Enough'. While some of its supply chain is certified by FLA Workplace Code of Conduct (including all of the final stage of production), the brand lacks transparency and received a score of 21-30% in the Fashion Transparency Index.
How is Under Armour performing?
Under Armour sales soared 27% to $5.7 billion in 2021, with the company saying both consumer demand and brand strength were on an upswing despite disruptions from the pandemic. Sales and earnings for the crucial fourth quarter also beat Wall Street estimates.
How much is Under Armour net worth?
How much a company is worth is typically represented by its market capitalization, or the current stock price multiplied by the number of shares outstanding. Under Armour net worth as of July 15, 2022 is $3.87B.
What is Nike's net worth?
In 2020 the brand alone was valued in excess of $32 billion, making it the most valuable brand among sports businesses. Previously, in 2017, the Nike brand was valued at $29.6 billion. Nike ranked 89th in the 2018 Fortune 500 list of the largest United States corporations by total revenue.
Is under Armour a good company?
Labour conditions. On the labour front, Under Armour is rated 'Not Good Enough'. While some of its supply chain is certified by FLA Workplace Code of Conduct (including all of the final stage of production), the brand lacks transparency and received a score of 21-30% in the Fashion Transparency Index.
Should I invest in UAA?
The financial health and growth prospects of UAA, demonstrate its potential to outperform the market. It currently has a Growth Score of A. Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of A.
How much does Under Armour make in 2019?
Analysts are currently looking for Under Armour to earn only $0.33 a share in 2019, meaning shares now trade at over 46 times one-year forward earnings estimates. That's nearly double Nike's valuation at 24 times.
How much will Nike earnings grow in 2019?
Nike is expected to grow earnings by almost 17 percent in 2018 and 2019, while Under Armour has a much harder path because analysts are estimating earnings to increase by about 15 percent in 2018 and then jump by almost 47 percent in 2019.
How much is Under Armour's 2020 cash burn?
Under Armour has gone into cost-cutting mode by chopping $325 from its 2020 operating expenses and furloughing 600 employees. The cash burn for Q1 2020 was (-$366.7 million) of the $959 million in cash on hand (including its revolver) with $2.24 billion in debt. The Company raised $440 million on May 22, 2020, in an upsized offering of the 1.50% convertible senior note due 2024 with conversion to Class C shares at management’s discretion. Convertible notes are always a raw deal for shareholders due to the dilutive nature and relation to the common stock conversion price. However, this does beef up the cash position pumping up cash-per-share (CPS) to nearly $3.20. As malls re-open and states lift restriction mandates and sports leagues start to tentatively resume schedules, UAA should start to see some recovery. While LULU and NKE have embodied the restart narrative turning sentiment positive, UAA just needs to show an uptick in improvement to paint itself as a value play especially when trading at just 2-3X CPS. However, the technicals signal the potential for cheaper entry levels if the monthly inverse pup breakdown pattern materializes.
Does Under Armour have isolation mandates?
The isolation mandates have also caused sporting events to cancel or postpone games thereby plunging demand for sports apparel. Under Armour reported a (-28%) drop in sports apparel sales in North America, which accounts for 60% of total revenues alone. The Company had already guided down North American revenues by 5% to 9% on its Q4 2019 release which set the bar low but managed to come in much lower. The Company has neglected its digital online channel for years as competitors Nike and Lululemon thrived on their digital channel top-line growth explosion. Direct-to-consumer digital sales accounted for only 10% of total sales in prior quarters. During the conference call, the Company noted Q1 2020 digital sales grew by an embarrassing 2% YoY. Compare this to the 41% digital sales growth for Lululemon for their quarter ended Feb 2020 or the 30% digital sales growth (in China) reported by Nike in its recent Q3 release.
Signals & Forecast
There are mixed signals in the stock today. The Under Armour Inc stock holds a buy signal from the short-term moving average; at the same time, however, the long-term average holds a general sell signal.
Support, Risk & Stop-loss
Under Armour Inc finds support from accumulated volume at $17.51 and this level may hold a buying opportunity as an upwards reaction can be expected when the support is being tested.
Is Under Armour Inc stock A Buy?
Under Armour Inc holds several positive signals, but we still don't find these to be enough for a buy candidate. At the current level, it should be considered as a hold candidate (hold or accumulate) in this position whilst awaiting further development.
Insiders are neutral as most recent trades are sells in Under Armour Inc
In the last 100 trades there were 2.45 million shares bought and 2.09 million shares sold. The last trade was done 8 days ago by Stanton John Patrick who bough 43.22 thousand shares. For the period there has been more stocks bought than sold among the insiders, but most of the latest transaction have been insiders selling.
About Under Armour Inc
Under Armour, Inc., together with its subsidiaries, develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America.
Golden Star Signal
This unique signal uses moving averages and adds special requirements that convert the very good Golden Cross into a Golden Star. This signal is rare and, in most cases, gives substantial returns. From 10 000+ stocks usually only a few will trigger a Golden Star Signal per day!
Top Fintech Company
featured in The Global Fintech Index 2020 as the top Fintech company of the country.
There are a number of reasons why it's best to stay away from this struggling apparel maker
One of the most important skills a successful investor can possess is the ability to say no to potential investment opportunities that do not fit certain required criteria. This saves valuable time and allows you to quickly move on to the next idea.
Where's the moat?
Warren Buffett once said: "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes." I've found that to be an extremely helpful mental screen to use before making a buy decision.
Missing the athleisure trend
In addition, Under Armour completely missed the athleisure trend. The company's earlier products were geared mainly toward football players, but as companies like Nike and lululemon athletica started making athletic clothing that combined comfort and fashion, Under Armour failed to expand in this category.
Accounting issues
Under Armour's founder, Kevin Plank, and CFO, David Bergman, recently received Wells Notices from the Securities and Exchange Commission relating to accounting irregularities from late 2015 through 2016. The company is being investigated for possibly moving sales around from quarter to quarter in order to make financial results appear smoother.
On to the next one
The lack of a competitive advantage, missing the boat on a massive consumer trend, and an open accounting investigation all lead me to say no to Under Armour's stock. What was once a Wall Street darling has since been on a downward spiral as brand awareness diminishes.
Stagnating Revenue
Under Armour has seen its revenue stagnate for some time now, and that is the primary reason the stock has fallen so sharply since peaking in October of 2015 from a price around $50 per share, to a price of $13.10 on February 6—a decline of about 74%.
Bearish Bets
The stagnating revenue is likely why traders are so bearish on the upcoming results. The long straddle options strategy is pricing in a rise or fall in the stock of roughly 15% from the $13.50 strike price set to expire on February 16.
Critical Support Level
The chart of Under Armour also tells a story of a stock that is likely heading lower. The stock has been trending lower since peaking at $16.70 back at the end of December, after filling a gap created the last time the company reported results on October 31.
The Stock Is Technically Oversold
The 200-day moving average for UAA stock sits at $17. That means the shares are trading about 60% below their 200-day moving average.
The Bottom Line on UAA Stock
Under Armour is in trouble. There’s no denying that obvious fact. Consumers aren’t buying athletic apparel right now and even if they were, they likely wouldn’t be buying much of Under Armour’s clothes.
