Under Armour: Running Higher
- Under Armour rallied following a big Q2 beat placing a lot of key metrics above 2019 levels.
- The athletic apparel company has pushed gross margins towards 50% with a focus on selling full priced performance gear.
- The stock is cheap trading at a forward EV/S multiple of 1.7x and far below the 4.6x multiple of Nike.
- This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »
Based on strong results from peers and a post-COVID rebound, Under Armour (UA, UAA) was forecast to report a massive quarter for the period ending June. In no real surprise, the athletic apparel firm smashed estimates and the stock is still surging. My investment thesis remains Bullish on the stock with substantial upside to obtain peer valuation multiples.
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Disclosure: Long UA. Please review the disclaimer page for more details.
Update - Nov. 2
Under Armour reported a massive quarter considering the supply chain issues, especially at Nike (NKE). The stock has soared to the previous double top around $25.50 and the presumption is that Under Armour doesn't look back now.
- Q3 Non-GAAP EPS of $0.31 beats by $0.16.
- Revenue of $1.55B (+8.4% Y/Y) beats by $80M.
- For FY2021, the company expects revenue up approximately 25% vs. prior view of up at a low twenties percentage rate and adjusted EPS of $0.74 vs. previous outlook of 0.50-$0.52 and consensus of $0.54.
Update - Sept. 16
This is exactly why UA needs to focus on performance sports wear.
- On Holding AG (NYSE:ONON) is up another 14% on day two of trading and topped out at $40 per share earlier in the session.
- Volume on ONON today is over 13M shares of the 616M shares outstanding. At the high point, ONON traded with a market cap of $10.9B, which is higher than Levi Strauss's (NYSE:LEVI) cap at $10.6B, Under Armour's (NYSE:UAA) cap at $9.5B, Crocs' (NASDAQ:CROX) cap at $9.3B and Ralph Lauren's (NYSE:RL) cap at $8.3B.