Shares of Under Armour closed at $7.22 which may offer a good entry point for new investors. Over the past 12 months UAA has hit a high of $12.78. In November 2021 UAA shares were trading as high as $26.96. The all-time high for UAA was achieved in September 2015 at $52.05. While the roller coaster disappointment has led us to this point, the current price is in value territory.
The company appears to be hovering around support from May 2023 and October 2022.
Over the past 4 quarters UAA has beat on both revenue and earnings per share analyst estimates. Specifically in the latest quarter revenue beat by a wider margin compared to any other quarter. This is a positive development to see.
The next earnings release is expected to be the least desired of the fiscal year. An earnings surprise here can re-ignite some life back into the stock price.
With a market cap sitting just over 3 billion it is a reasonable entry for a company with revenues in excess of 5.9 billion. While revenue is expected to stay in the low single digit growth over the next 4 years, earnings per share can expect to see double digit improvement in each fiscal.
As someone who enjoys wearing athletic apparel I’m a supporter of UAA athletics. The quality of the product competes well with competitors.
2010 was the last time we saw UAA trade well below $7.00. The company had a quarter of the revenue which it now sees today. Revenue is currently more in line with 2015 pricing when the stock was trading above $50/share.
Trading below $7.00 potentially opens the company up to the hostile take overs. Of the big athletic conglomerates its possible to see one target the company for the 6B revenue and brand. I wouldn’t be surprised if a company such as LULU or Nike attempted a cash buy-out or all stock transition. Taking into account the large institutional ownership this may be exactly the type of improvement they are looking for to take their investment to new levels.
At the time of writing this article I currently don’t have a position in UAA but may enter into one at any time.