#7 - Under Armour (NYSE:UAA)
Under Armour (NYSE: UAA) - Under Armour’s stock is on fire. 2018 has seen the stock price increase by approximately 60%. To put that in perspective, that’s a higher percentage gain than the FANG stocks and even some of the year’s top initial public offerings (IPOs). What should concern investors going forward is why did it rise so much and what does that say about future performance? To answer the first question, Under Armour had benefited from exceedingly low expectations. That’s not their fault. As a company that is rooted in athletic performance, they are playing the schedule they have. However, a look under the hood shows a restructuring based on cost cutting and more efficient inventory management, not true market share growth. To illustrate that, its revenues rose just 2% in the last quarter, with North American sales actually declining by the same percentage. On that score, the company is facing challenges as consumers are moving back towards fashion and away from the “performance sportswear” that made Under Armour the trendy choice just a few years ago. This has led UAA to start expanding its distribution into lower-end stores such as Kohl’s, where the company may have to compete with other brands that use heavy discounting, something UAA has been reluctant to do. With a forward price-earnings multiple of 69, this is a stock that looks overvalued at the present time.
About Under Armour
Under Armour, Inc, together with its subsidiaries, engages developing, marketing, and distributing performance apparel, footwear, and accessories for men, women, and youth. The company provides its apparel in compression, fitted, and loose fit types. It also offers footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications.
Read More - Current Price
- $9.52
- Consensus Rating
- Hold
- Ratings Breakdown
- 5 Buy Ratings, 13 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $9.03 (5.1% Downside)
