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Under Armour's (UAA) Recent Gains Might Shock Investors

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Shares of Under Armour (UAA - Free Report) surged 3.58% on Wednesday to hit $21.40 per share, continuing the sportswear company’s impressive run. With that said, let’s dive into Under Armour’s recent stock price movement to see just how well its stock has performed.

At this point, many investors have likely heard and read about the company’s late fiscal 2017 decline. Under Armour’s sales slipped in the third quarter last year for the first time since it went public, after the company began to suffer from overall North American market pressures and also from its own success. In the fourth quarter, CEO Kevin Plank said that “complexities as a result of rapid growth” forced the company to streamline and simplify its go to market strategies.

As part of its revamp, Under Armour adopted a 2018 restructuring plan in which the company expects to spend between $110 million to $130 million. Under Armour spent $45 million on restructuring costs in the first quarter. But investors started to move on from Under Armour stock long before its recent downturn.

Under Armour stock hit its all-time high in September 2015. Since then, the stock has sunk 47% over the last three years. However, investors will note in the chart below that UAA stock has soared since it reported its third-quarter financial results on Halloween.

 

It seems investors bought the Under Armour dip at what looks like its bottom—at least for now. Under Armour stock hit its 52-week and five-year low of roughly $11.60 per share in early November. Since then, the company’s stock price is up nearly 78%, which crushes the S&P 500’s 4.2% climb.

It is also worth noting that shares of Under Armour have even topped tech giant’s Amazon (AMZN - Free Report) and Micron’s (MU) massive climbs, of 47% and 41%, respectively, since November 1. Under Armour stock looks even better compared to its direct competitors, Nike (NKE - Free Report) and Adidas (ADDYY - Free Report) . The company even quietly outpaced Lululemon’s (LULU - Free Report) impressive 72% climb during this time frame.

 

Bottom Line

At the moment it remains unclear if Under Armour will be able to maintain its current run of success or if this momentum will subside as we move farther into the second quarter. One thing to note is that Under Armour’s outsized run has made the stock look very expensive.

UAA is currently trading at 84.9X forward 12-month Zacks Consensus EPS estimates, which is just below the all-time high it reached recently. This means that its earnings estimates have failed to climb along with its surging stock price. Investors should also note that Under Armour was trading as low as 29.1X on November 2.  

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