Stock (Symbol) |
Under Armour (UA) |
Stock Price |
$94 |
Sector |
| Retail & Travel |
Data is as of |
| November 12, 2015 |
Expected to Report |
| Feb 2 – Feb 8 |
Company Description |
 Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The brand’s moisture-wicking fabrications are engineered in many designs and styles for wear in nearly every climate to provide a performance alternative to traditional products. The Company’s primary business operates in four geographic segments: North America, comprising the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia and Latin America. Each of these geographic segments operates predominantly in one industry: the design, development, marketing and distribution of performance apparel, footwear and accessories. Beginning December 2013, the Company also operates its acquired MapMyFitness business as a separate segment. Source: Thomson Financial |
Sharek’s Take |
 Under Armour (UA) is going to be the next Nike, and investors are well aware of this. Thus the stock has been sky-high for more than a year now. UA is a great company, growing rapidly in footwear, woman’s apparel, and overseas markets. Sales are expected to grow from $3 billion last year to $4 billion this year, $5 billion next year and $10 billion by 2020. The problem is the stock’s P/E is too high. I updated my UA charts on November 12th when the stock was $94. Since then the stock’s fallen to $87 but it still sells for 64 times 2016 earnings estimates. My Fair Value on UA is $61 in 2016 and $78 in 2017. So right now Under Armour is still too high to buy. I’ll look to get in below $70. |
One Year Chart |
 Such a big move higher this year. One would figure profits were jumping. But they aren’t. UA is having to spend to grow and that’s crimping profits. But the outlook is great, here’s qtrly estimates for the next 4 qtrs: +20%, +60%, +43%, +43%. Profits are expected to climb 30% in 2016, and with a P/E in the 60s I feel the good news is already priced in. Also, UA has been lowering estimates a bit, so the stock doesn’t have a lot of momentum behind it. |
Fair Value |
 I really want to buy this stock — it’s a must own growth stock. There’s great growth opportunity for the next five years. Still, even at $87 the price is steep. I think UA will be $78 in two years. I need a better entry point. |
Bottom Line |
 Under Armour is digesting a recent move higher, and that’s a good thing. At least the stock didn’t crash back down. Great profit growth and stock growth the last decade, the only blemishes are the 2008 recession and this year’s expected growth of 11%.
Under Armour is going to be the next Nike, and investors have priced the stock up in anticipation. But at least we are making progress towards getting in at a good price, as the stock is down almost 20% from its highs. UA is at the top of my radar, but it really needs to drop below $70 for me to invest. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
