Under Armour Inc (UAA, Financial) has recently demonstrated a robust performance in the stock market, with a notable 12.21% gain over the past week and a 14.91% increase over the last three months. As of the latest data, the company boasts a market capitalization of $3.33 billion. According to GuruFocus's valuation metrics, Under Armour is currently modestly undervalued with a GF Value of $9.28. This is a shift from three months ago when it was considered significantly undervalued at a GF Value of $10.57.
Company Overview
Under Armour Inc, a key player in the Manufacturing - Apparel & Accessories industry, is renowned for its innovative approach in developing, marketing, and distributing athletic apparel and accessories. The company caters to a diverse clientele that includes professional athletes, sports teams, and active lifestyle enthusiasts. Under Armour operates through various channels including direct-to-consumer platforms, which encompass e-commerce and numerous factory and brand house stores, as well as wholesale distributions. Founded in 1996 and headquartered in Baltimore, Under Armour has expanded its reach globally, maintaining a significant presence in North America, Asia-Pacific, and Europe.
Assessing Profitability
Under Armour's financial health can be partially gauged through its Profitability Rank of 5/10, indicating an average level of profitability within its sector. The company's Operating Margin stands at 4.03%, which is superior to 50.92% of its peers. Additionally, its Return on Equity (ROE) of 11.17% and Return on Assets (ROA) of 4.79% are higher than 75.27% and 70.95% of its industry counterparts, respectively. The Return on Invested Capital (ROIC) at 6.54% also surpasses 69.22% of its peers. These metrics underscore Under Armour's efficient management and profitability relative to its competitors.
Growth Metrics
Under Armour's growth trajectory is reflected in its 3-Year Revenue Growth Rate per Share of 1.40%, which ranks better than 35.54% of its industry peers. However, the 3-Year EPS without NRI Growth Rate shows a decline of 14.00%, which still ranks better than 25.34% of its competitors. This mixed growth performance highlights the challenges and competitive pressures the company faces while also underscoring its resilience in generating revenue growth amidst these conditions.
Investor Confidence
Notable investors have maintained positions in Under Armour, reflecting confidence in its market strategy and growth potential. The top holder, Paul Tudor Jones (Trades, Portfolio), owns 1,491,758 shares, representing 0.34% of the shares outstanding. Following him, Lee Ainslie (Trades, Portfolio) holds 280,394 shares, and Jefferies Group (Trades, Portfolio) holds 48,251 shares. These investments by prominent market players underscore a cautious yet optimistic outlook towards the company's future.
Competitive Landscape
Under Armour operates in a highly competitive sector, with key rivals including Ermenegildo Zegna NV (ZGN, Financial) with a market cap of $2.64 billion, Hanesbrands Inc (HBI, Financial) at $2.06 billion, and Kontoor Brands Inc (KTB, Financial) which has a market cap of $3.85 billion. Each of these companies presents unique challenges and competitive dynamics for Under Armour, necessitating continuous innovation and strategic market positioning.
Conclusion
In conclusion, Under Armour's recent stock performance and current valuation suggest a company on the rise, navigating through competitive pressures with a solid foundation in profitability and strategic market expansions. While the growth metrics present some areas of concern, particularly in EPS growth, the overall financial health and investor interest in the company provide a positive outlook for potential investors. As the market dynamics evolve, Under Armour appears well-positioned to maintain its competitive edge and enhance shareholder value.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
