Under Armour Stock Up 28% Over Last Month, What’s Next?
[Note: UA changed its fiscal year-end to March 31 from December 31. The most recent Q2 FY’23 refers to the quarter that ended on September 30, 2022.]
Under Armour (NYSE: UA), a sports equipment company that manufactures footwear, sports, and casual apparel, has increased by 28% over the last twenty-one trading days (one month) and currently stands at around $11. The stock has rallied since last month after dipping to very cheap levels in October. A sturdy balance sheet and a new CEO announcement (Stephanie Linnartz) have added to the rationale for the stock growth. The new CEO is expected to start working on Feb. 27, 2023. The athletic apparel company is hoping to grow its digital business and win back shoppers in the 16- to 20-year-old range. In order to compete successfully with Nike and Lululemon, Under Armour has been trying to expand its e-commerce revenues and boost profits. Of late, the company has been struggling with low margins, costly litigation, and a slashed fiscal year 2023 outlook.
Under Armour cut the FY’23 revenue growth rate to the low single-digit percentage level after original expectations of currency-neutral 7% to 9% growth. It should be noted that the company cut shipments last year leaving inventory flat to down from the prior year’s levels despite higher sales now. Under Armour also guided to FY23 gross margin impacts of 375 to 425 basis points.
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Now, is UA stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last seven years, there is a 59% chance of a rise in UA stock over the next month (twenty-one trading days). See our analysis on UA’s Stock Chance Of Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of rising’ using last seven years’ data
[1] Returns of 4.1% or higher over five-day period on 436 occasions out of 1724 (25%); Stock rose in the next five days in 215 of these 436 instances (49%)
[2] Returns of 11% or higher over ten-day period on 202 occasions out of 1724 (12%); Stock rose in the next ten days in 91 of these 202 instances (45%)
[3] Returns of 28% or higher over twenty-one-day period on 34 occasions out of 1723 (2%); Stock rose in the next twenty-one days in 20 of these 34 instances (59%)
We forecast Under Armour’s Revenues to be $5.9 billion for the fiscal year 2023, up 2% y-o-y. Looking at the bottom line, we now forecast earnings per share (EPS) to come in at 65 cents. Given the changes to our revenues and EPS forecast, we have revised Under Armour’s Valuation to a little more than $11 per share, based on a $0.46 expected EPS and a 23.9x P/E multiple for the fiscal year 2023.
It is helpful to see how its peers stack up. UA Peers shows how Under Armour stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.
| Returns | Jan 2023 MTD [1] |
2023 YTD [1] |
2017-23 Total [2] |
| UA Return | 19% | 19% | -58% |
| S&P 500 Return | 5% | 5% | 80% |
| Trefis Multi-Strategy Portfolio | 10% | 10% | 245% |
[1] Month-to-date and year-to-date as of 1/24/2023
[2] Cumulative total returns since the end of 2016
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