Under Armour Inc (UAA, Financial), a prominent player in the athletic apparel industry, has experienced a notable stock price fluctuation recently. Over the past week, the stock has seen a decline of 6.99%, yet it has surged by 12.01% over the last three months. Currently, the stock is fairly valued at $7.88, with a GF Value of $8.59. This valuation marks a shift from three months ago when it was considered modestly undervalued.
Company Overview
Founded in 1996 and based in Baltimore, Under Armour Inc specializes in the development, marketing, and distribution of performance-oriented athletic apparel, footwear, and accessories. With a strong market presence in North America, Asia-Pacific, and Europe, the company caters to both professional athletes and active lifestyle enthusiasts. Under Armour sells its products through a blend of direct-to-consumer channels, including over 400 retail and factory outlets, and wholesale distributions. The company also enhances its market presence through digital platforms like its fitness app, MapMyFitness.
Assessing Profitability
Under Armour's financial health, as indicated by its Profitability Rank of 5/10, suggests moderate profitability. The company's current Operating Margin stands at -1.18%, which is more favorable than 27.19% of its peers in the industry. However, its Return on Equity (ROE) and Return on Assets (ROA) are -4.00% and -1.69% respectively, indicating challenges in asset and equity efficiency. Moreover, the Return on Invested Capital (ROIC) is -3.53%, reflecting less efficient use of capital compared to some competitors.
Growth Metrics
Under Armour's growth trajectory shows a mixed picture. The 3-Year Revenue Growth Rate per Share is 1.40%, which ranks better than 35.48% of its competitors. However, the 3-Year EPS without NRI Growth Rate is -14.00%, indicating a decline but still performing better than 25.27% of its peers. This suggests that while the company is growing its revenue, it is facing challenges in maintaining its earnings growth.
Significant Shareholders
Notable investors in Under Armour include Prem Watsa (Trades, Portfolio), holding 4,223,700 shares (0.98%), and Paul Tudor Jones (Trades, Portfolio), with 1,513,725 shares (0.35%). Their investments reflect a continued belief in the company's potential despite its current challenges.
Competitive Landscape
Under Armour operates in a competitive industry, with key players like Kontoor Brands Inc (KTB, Financial) with a market cap of $4.11 billion, Ermenegildo Zegna NV (ZGN, Financial) at $2.6 billion, and Columbia Sportswear Co (COLM, Financial) at $4.73 billion. These companies represent significant competition but also highlight the scale of opportunity within the apparel and accessories market.
Conclusion
Under Armour's recent stock performance reflects a complex interplay of market dynamics and internal financial health. While the company faces profitability challenges, its strategic market positioning and ongoing digital initiatives provide a solid foundation for future growth. Investors and market watchers will do well to keep an eye on how Under Armour navigates these challenges while maintaining its competitive edge in the global athletic apparel market.
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.
