Under Armour (UAA) AI Stock Analysis

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Under Armour

(NYSE:UAA)

Rating:47Neutral

Price Target:―

Under Armour is currently facing substantial financial and operational challenges, highlighted by declining revenue and profitability, weak technical indicators, and a challenging valuation. Despite these issues, the improved gross margins and strategic adjustments noted in the earnings call provide a glimmer of hope. The stock's overall score reflects these mixed elements, with significant risks and some potential for recovery.

Positive Factors

Financial Performance

Revenues for the quarter came in above implied guidance, despite being down 10%.

Gross Margins

Gross margins increased driven by supply chain efficiencies, lower discounting and promos, and a favorable product mix.

Management Strategy

The evolution of the management of the Under Armour brand outweighs the fact that no FY26 guidance was provided.

Negative Factors

APAC Region Performance

Sales in the APAC region declined significantly due to a competitive environment and strategic buybacks.

Market Positioning

There is room for valuation de-rating from high levels, and disadvantaged positioning in an increasingly fragmenting sportswear market.

Tariffs Impact

The turnaround is complicated by tariff-related uncertainties which impact margins.

Under Armour (UAA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.73B

Dividend YieldN/A

Average Volume (3M)14.06M

Price to Earnings (P/E)―

Beta (1Y)1.08

Revenue Growth-7.47%

EPS Growth-131.70%

CountryUS

Employees6,800

SectorConsumer Cyclical

Sector Strength70

IndustryApparel - Manufacturers

Share Statistics

EPS (TTM)-0.08

Shares Outstanding188,822,720

10 Day Avg. Volume10,951,961

30 Day Avg. Volume14,062,293

Financial Highlights & Ratios

PEG Ratio0.04

Price to Book (P/B)1.44

Price to Sales (P/S)0.00

P/FCF Ratio-17.77

Enterprise Value/Market Cap1.21

Enterprise Value/Revenue0.15

Enterprise Value/Gross Profit1.31

Enterprise Value/Ebitda5.49

Forecast

1Y Price Target

$6.90

Price Target Upside4.55% Upside

Rating ConsensusHold

Number of Analyst Covering21

Under Armour Business Overview & Revenue Model

Company DescriptionUnder Armour, Inc., together with its subsidiaries, engages in the developing, marketing, and distributing performance apparel, footwear, and accessories for men, women, and youth. The company offers its apparel in compression, fitted, and loose fit types. It also provides footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company offers accessories, which include gloves, bags, headwear, and sports masks; and digital subscription and advertising services under the MapMyRun and MapMyRide platforms. It primarily offers its products under the UNDER ARMOUR, UA, HEATGEAR, COLDGEAR, HOVR, PROTECT THIS HOUSE, I WILL, UA Logo, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through a network of 422 brand and factory house stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Under Armour, Inc. was incorporated in 1996 and is headquartered in Baltimore, Maryland.

How the Company Makes MoneyUnder Armour generates its revenue primarily through the sale of its branded performance apparel, footwear, and accessories. The company's revenue streams are diversified across wholesale, direct-to-consumer, and licensing operations. The wholesale segment involves selling products to retail stores and distributors, while the direct-to-consumer segment includes sales through Under Armour-branded stores and its online platform. Additionally, Under Armour benefits from licensing agreements that allow third parties to produce and sell products under the Under Armour brand. Key factors contributing to its earnings include strategic partnerships with athletes, sports teams, and events, which enhance brand visibility and consumer engagement. The company also invests in technology and innovation to maintain a competitive edge in the sportswear market.

Under Armour Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q4-2025)

% Change Since: 6.28%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Negative

While Under Armour has achieved a notable improvement in gross margin and cost management, these positive strides are overshadowed by significant revenue declines across key regions and channels, particularly in North America and APAC. The brand faces challenges in revitalizing its DTC and e-commerce channels amid a competitive and promotional landscape. Additionally, the uncertainty surrounding trade policies adds further complexity to the company's turnaround efforts.

Q4-2025 Updates

Positive Updates

Gross Margin Expansion

Fourth quarter gross margin increased 170 basis points year-over-year to 46.7%, driven by supply chain benefits and reduced promotions.

SG&A Cost Management

SG&A expenses increased by only 1% to $607 million in the fourth quarter, with adjusted SG&A up 7%, reflecting cost management efforts and reduced consulting expenses.

Restructuring Savings

The fiscal 2025 restructuring plan has saved $35 million in fiscal '25, with expected run-rate savings of $75 million by fiscal '26 end.

Brand and Product Initiatives

Introduction of new premium product lines such as the Halo collection, and successful product launches like the Velociti Elite running shoe.

EMEA Performance

EMEA region remained flat on a currency-neutral basis, showing resilience despite overall revenue decline.

Negative Updates

Revenue Decline

Fourth quarter revenue declined 11% to $1.2 billion, with North America down 11% and APAC down 27%.

DTC and E-commerce Challenges

Direct-to-consumer revenue fell 15%, with e-commerce sales down 27% due to reduced promotional activities.

Footwear Revenue Decline

Footwear revenue declined by 17%, partly due to proactive portfolio management efforts.

Licensing Revenue Drop

Licensing revenue was down 15%, primarily due to the decision to bring the socks business in-house.

Tariff Uncertainty

Impact of recent trade policy changes creates significant uncertainty, affecting the company's ability to give a full-year outlook.

Company Guidance

In the fourth quarter of fiscal 2025, Under Armour exceeded its initial outlook, with gross margin being a significant metric benefiting from strategies such as reducing promotions in direct-to-consumer (DTC) businesses. Revenue for the quarter was down 11% to $1.2 billion, with notable regional performance, including an 11% decline in North America and a 2% decrease in EMEA, while revenue in APAC fell 27%. The company reported a gross margin increase of 170 basis points year-over-year to 46.7%, largely due to supply chain efficiencies, pricing benefits, and favorable foreign currency impacts. SG&A expenses were up 1% to $607 million, with adjusted SG&A showing an increase of 7%. Under Armour also reported an operating loss of $72 million, with adjusted diluted loss per share at $0.08. Inventory was down 1% year-over-year, and the company ended the quarter with $501 million in cash and no outstanding amounts on its revolving credit facility. Looking ahead, Under Armour anticipates a 4% to 5% revenue decline in the first quarter of fiscal 2026, driven by softness in the North American market and ongoing efforts to limit promotional activities.

Under Armour Financial Statement Overview

Summary

Under Armour is facing financial challenges with declining revenue and profitability. Despite a stable balance sheet with moderate leverage, its cash flow generation is weak, impacting its overall financial health. The company needs to focus on improving operational efficiencies and cash flow management to enhance its financial standing.

Income Statement

Neutral

Under Armour's TTM data shows a decline in revenue and profitability. The gross profit margin is approximately 47.5%, indicating a decent gross profitability, but the company is currently experiencing a net loss, reflected by a negative net profit margin of -2.52%. The EBIT and EBITDA margins are also weak at -2.25% and 0.29% respectively, indicating challenges in operational efficiency and profitability.

Balance Sheet

Neutral

The company has a moderate debt-to-equity ratio of about 0.66, suggesting a balanced use of debt and equity. However, the return on equity is negative, reflecting current financial underperformance. The equity ratio stands at 42.9%, indicating a stable financial structure with a reasonable level of equity in the assets.

Cash Flow

Negative

Under Armour's TTM cash flow statement highlights challenges in cash generation with a negative free cash flow. The operating cash flow to net income ratio is low, reflecting inefficiencies in cash generation from operational activities. The negative free cash flow to net income ratio further underscores liquidity pressures.

TTM	Mar 2024	Mar 2023	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
5.32B	5.70B	5.90B	5.68B	4.47B	5.27B
	Gross Profit
2.52B	2.63B	2.65B	2.86B	2.16B	2.47B
	EBIT
-119.60M	229.75M	283.81M	486.29M	-613.44M	236.77M
	EBITDA
55.34M	372.34M	421.43M	708.47M	321.30M	417.51M
	Net Income Common Stockholders
-134.07M	232.04M	386.77M	360.06M	-549.18M	92.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
858.69M	858.69M	711.91M	1.67B	1.52B	788.07M
	Total Assets
4.76B	4.76B	4.86B	4.99B	5.03B	4.84B
	Total Debt
1.44B	1.44B	1.52B	1.50B	2.01B	1.30B
	Net Debt
584.10M	584.10M	809.27M	-165.15M	488.17M	511.15M
	Total Liabilities
2.61B	2.61B	2.86B	2.90B	3.35B	2.69B
	Stockholders Equity
2.15B	2.15B	2.00B	2.09B	1.68B	2.15B
Cash Flow		Free Cash Flow
-153.66M	203.64M	-197.71M	595.07M	120.57M	363.23M
	Operating Cash Flow
3.73M	353.97M	-9.91M	664.83M	212.86M	509.03M
	Investing Cash Flow
-116.73M	-105.33M	-152.80M	-68.35M	66.34M	-147.11M
	Financing Cash Flow
-158.16M	-78.69M	-126.38M	-418.74M	436.85M	-137.07M

Under Armour Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price6.60

Price Trends

50DMA

6.06

Positive

100DMA

6.75

Negative

200DMA

7.75

Negative

Market Momentum

MACD

0.16

Positive

RSI

54.61

Neutral

STOCH

41.33

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UAA, the sentiment is Neutral. The current price of 6.6 is above the 20-day moving average (MA) of 6.52, above the 50-day MA of 6.06, and below the 200-day MA of 7.75, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 54.61 is Neutral, neither overbought nor oversold. The STOCH value of 41.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UAA.

Under Armour Risk Analysis

Under Armour disclosed 36 risk factors in its most recent earnings report. Under Armour reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Under Armour Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZGN	76 Outperform	$3.50B	25.76	8.89%	1.50%	2.26%	-37.52%
KTB	71 Outperform	$3.80B	16.76	56.32%	3.02%	1.19%	3.19%
COLM	63 Neutral	$3.38B	15.78	12.34%	1.94%	-1.69%	-4.01%
Sector *	62 Neutral	$6.94B	11.29	2.95%	3.87%	2.70%	-24.49%
VFC	53 Neutral	$4.86B	―	-2.39%	2.88%	-8.42%	57.91%
HBI	52 Neutral	$1.74B	―	-23.24%	―	-33.72%	-892.32%
UAA	47 Neutral	$2.73B	―	-9.95%	―	-7.47%	-131.70%

* Consumer Cyclical Sector Average

Performance Comparison

UAA

Under Armour

6.57

-0.37

-5.33%

COLM

Columbia Sportswear

61.30

-21.09

-25.60%

HBI

Hanesbrands

4.85

-0.40

-7.62%

VFC

12.59

-0.70

-5.27%

KTB

Kontoor Brands

68.11

-4.08

-5.65%

ZGN

Ermenegildo Zegna

8.54

-3.76

-30.57%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.