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We expect Under Armour Inc. (UA - Snapshot Report), the marketer and distributor of apparel, footwear and accessories, to beat expectations when it reports fourth-quarter 2013 results on Jan 30, 2014. In the last quarter, it posted a positive surprise of 3%.

Why a Likely Positive Surprise?

Our proven model shows that Under Armour is likely to beat earnings because it has the right combination of two key components.       

Positive Zacks ESP: Under Armour currently has an Earnings ESP of +3.77%. This is because the Most Accurate estimate stands at 55 cents, while the Zacks Consensus Estimate is pegged at 53 cents.

Zacks Rank #3 (Hold): Note that stocks with a Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings estimates. The sell-rated stocks (Zacks Rank #4 and #5) should never be considered going into an earnings announcement.

The combination of Under Armour’s Zacks Rank #3 (Hold) and +3.77% ESP makes us very confident regarding a positive earnings beat on Jan 30.

What is Driving the Better-than-Expected Earnings?     

Under Armour is poised to evolve into a leading global athletic brand and has significant long-term growth prospects, driven by a strong brand image, international growth opportunities and continued market share gains, supported by product innovation, direct to consumer sales, category development, cost reductions endeavors, store expansion and inventory management. The company in the last four quarters has outperformed the Zacks Consensus Estimate by an average of 38.2%.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows these have the right combination of elements:

Herbalife Ltd. (HLF - Snapshot Report) has an Earnings ESP of +1.71% and a Zacks Rank #1 (Strong Buy).

Abercrombie & Fitch Co. (ANF - Analyst Report) has an Earnings ESP of +1.96% and a Zacks Rank #2 (Buy).

Finish Line Inc. (FINL - Snapshot Report) has an Earnings ESP of +1.18% and a Zacks Rank #2 (Buy).

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