Under Armour — Thoughts on Growth

It’s been a good four years for Under Armour (NYSE:UA). Can Under Armour’s business double again over the next four years?

Under Armour’s wholesale apparel revenues grew from 650 million in 2010, to over 1.5 billion in 2014, a doubling in four years.

I was wondering if one could believe that this revenue would grow again — i.e.  another 2X in the next four years?

See the chart below — I had no way to decide whether this is probable, or merely wishful thinking?

The sports apparel category is growing at around 8% over the last few years.  That is double the rate of the regular apparel category.  And, the world apparel market, according to Statista,  is estimated to increase to $170 billion in the next three years,  a 5.4% yearly growth.

Then, I realized something interesting — I thought: Nike is a key competitor to Under Armour, and much larger. Under Armour, if I was running it — and their management is smart — would definitely look to take a bite out of Nike’s lunch. I then plotted  Nike’s revenue — and looked at the chart below.

Seeing that Nike’s revenues (the top line) grew from 5 to over 8 billion in the same 2010 to 2014 period, and Under Armour (the bottom line)  is only 1.5 billion in size currently, this implies there is a huge amount of potential for Under Armour, even if they only can capture a small portion of Nike’s market share.

At least, that’s how it seems to me. What do you think?