UA  Under Armour Inc.

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Apparel

Market Cap.

7.96B

Vuru Grade

39.13/100

Current Price

$18.07
+0.06 (+0.33%)

Growth Price

$3.41
Overvalued by 81.14%

Stability Price

$5.60
Overvalued by 69.03%

Company Metrics

  • P/E 45.63
  • P/S 1.62
  • P/B 3.93
  • EPS 0.40
  • Cash ROIC 3.91%
  • Cash Ratio 0.37
  • Dividend 0 / N/A %
  • Avg. Vol. 3.70M
  • Shares 440.51M
  • Market Cap. 7.96B

Company Description

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Under Armour: A Case Of Market Inefficiency?
Seeking Alpha - May 24, 2017
Google and some other charting platforms still do not correctly reflect the recent 1:2 stock split; instead, they incorrectly show a 50% drop in share price in April 2016.
Time To Throw In The Towel On Under Armour?
Seeking Alpha - May 23, 2017
Case in point: Under Armour Inc (NYSE:UA)(NYSE:UAA). Shares have gotten smoked over the past year, making it one of the worst performing names in the S&P 500.
Under Armour Inc (UA) Stock Is Too Out of Shape to Bother With
Investorplace.com - May 24, 2017
Back on April 27, Under Armour Inc (NYSE:UAA, NYSE:UA) shareholders were cheering the company's first-quarter results, bidding Under Armour stock up to the tune of 10%.
Under Armour Inc (UAA) Upgraded at Vetr Inc. - The Cerbat Gem
$1.16 Billion in Sales Expected for Under Armour Inc (UA) This Quarter - Chaffey Breeze
Under Armour Inc Rebounds From 52-Week Low -- Has the Comeback Begun?
Motley Fool - May 1, 2017
In this segment from Market Foolery, Mac Greer is joined by Motley Fool analysts Ron Gross and Jason Moser, who consider the case of athletic wear and fitness company Under Armour (NYSE:UA) (NYSE:UAA), which topped Wall Street expectations in the ...
Under Armour Inc (UAA) Stock Hasn't Hit Rock Bottom Yet
Investorplace.com - May 23, 2017
As InvestorPlace contributor Richard Saintvilus notes, Under Armour shares are “now trading 55% below its 52-week high.” For those that saw the company's potential back when the market value was initially this low, this is a chance to go back in time ...
The Founder of Under Armour Has Big Plans for 'Made in the USA'
Inc.com - May 2, 2017
Plank, who grew up in suburban Washington, relocated his athletic apparel business, Under Armour, to Baltimore in 1998, where he grew it into a public company with 2016 revenues approaching $5 billion.
Under Armour: A Step In The Wrong Direction
Seeking Alpha - May 3, 2017
In my original article on Under Armour, I discussed how international growth was an important thing to track for the company and in this area they did not disappoint.
Under Armour Inc (UAA) Stock Stopped Bleeding, But It's Still a Dead End - Investorplace.com
Under Armour Clears The Bar, Some Still Waving Red Flags - Benzinga
Under Armour Inc (UA) Stock Is Down 30%, But It's Still Not a Buy
Investorplace.com - May 16, 2017
Athletic apparel maker Under Armour Inc (NYSE:UAA, NYSE:UA) has seen its share price drop over 30% since the beginning of the year as worries about the firm's growth potential and profitability drove investors away.
Under Armour Inc (UAA) Upgraded by Vetr Inc. to “Strong-Buy” - The Cerbat Gem
The Under Armour Inc (UA) Director A B. Krongard Sells 4717 Shares of Stock - BangaloreWeekly
Under Armour Is Losing To Their 'Dumbest Competitor'
Seeking Alpha - May 8, 2017
Under Armour's first quarter earnings were NOT impressive, especially compared to their "dumbest" competitor Adidas.
Here's Why Under Armour Inc (UAA) Stock Finally Bottomed
Investorplace.com - May 12, 2017
Shares of Under Armour Inc (NYSE:UA, NYSE:UAA) have rebounded slightly since reporting better-than-expected first-quarter earnings.
Under Armour Inc (UA) Rating Lowered to Buy at Vetr Inc. - The Cerbat Gem
Under Armour Inc (UA) Releases Earnings Results, Beats Estimates By $0.03 EPS - Sports Perspectives
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for UA to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate UA's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$18.07 Current Price

$3.41 Growth Price (DCF)

Overvalued by 81.14%


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


UA's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$5.60 Stability Price (EPV)

Overvalued by 69.03%


Discount Rate: 15.0%

$0.80 NCA Price

Overvalued by 95.58%

$39.09 Book Price

Undervalued by 116.33%


Poor Cash Return on Invested Capital over the past 5 years

UA has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

UA has only created $3.91 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 149.11M 32.24M 78.51M -343.03M -82.26M
divided by
Invested Capital 563.01M 803.62M 1.08B 2.26B 2.71B
Cash ROIC 26.48% 4.01% 7.27% -15.18% -3.04%

Satisfactory Return on Equity over the past 5 years

UA has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

UA has generated $14.64 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 128.78M 162.33M 208.04M 232.57M 256.98M
divided by
Stockholders' Equity 816.92M 1.05B 1.35B 1.67B 2.03B
Return on Equity 15.76% 15.41% 15.41% 13.94% 12.65%

Mediocre Business Performance over the past 10 years

UA isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

UA has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -48.71M 30.92M 99.20M 19.93M -64.17M 149.11M 32.24M 78.51M -343.03M -82.26M

Good Balance Sheet

UA's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 40.59M 102.04M 187.30M 203.87M 175.38M 341.84M 347.49M 593.18M 129.85M 250.47M
Current Assets 322.25M 396.42M 448.00M 555.85M 689.66M 903.60M 1.13B 1.55B 1.50B 1.97B
Total Assets 390.61M 487.56M 545.59M 675.38M 919.21M 1.16B 1.58B 2.10B 2.87B 3.64B
Current Liabilities 95.70M 133.11M 120.16M 149.15M 183.61M 252.23M 426.63M 421.63M 478.81M 685.82M
Total Liabilities 110.13M 156.46M 145.59M 178.41M 282.78M 340.16M 524.39M 744.78M 1.20B 1.61B
Stockholder' Equity 280.49M 331.10M 400.00M 496.97M 636.43M 816.92M 1.05B 1.35B 1.67B 2.03B
Current Ratio 3.37 2.98 3.73 3.73 3.76 3.58 2.65 3.67 3.13 2.87
TL-to-TA 0.28 0.32 0.27 0.26 0.31 0.29 0.33 0.36 0.42 0.44

Consistent Reinvestment of Profits over the past 10 years

UA has consistently retained profits. This may put UA in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, UA can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 117.78M 156.01M 202.19M 270.02M 366.16M 493.18M 653.84M 856.69M 1.08B 1.26B
Retained Earnings Growth - 32.46% 29.60% 33.55% 35.61% 34.69% 32.58% 31.02% 25.66% 16.99%

Competitive Industry over the past 10 years

UA is likely operating in an industry with medium to low barriers to entry. This may mean that UA doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that UA invests heavily in R&D and Sales, General & Administrative expenses.

Only $6.43 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 52.56M 38.23M 46.79M 68.48M 96.92M 128.78M 162.33M 208.04M 232.57M 256.98M
divided by
Revenue 606.56M 725.24M 856.41M 1.06B 1.47B 1.83B 2.33B 3.08B 3.96B 4.83B
Net Profit Margin 8.66% 5.27% 5.46% 6.44% 6.58% 7.02% 6.96% 6.75% 5.87% 5.33%

Varying Pricing Power over the past 10 years

UA has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$53.75 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 305.04M 354.95M 413.03M 530.51M 1.47B 879.30M 1.14B 1.51B 1.91B 2.24B
divided by
Revenue 606.56M 725.24M 856.41M 1.06B 1.47B 1.83B 2.33B 3.08B 3.96B 4.83B
Gross Margin 50.29% 48.94% 48.23% 49.86% 100.00% 47.92% 48.74% 49.03% 48.08% 46.43%

High Capital Intensity over the past 10 years

UA spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

77.42% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 34.08M 38.59M 19.85M 30.18M 79.39M 50.65M 87.83M 140.53M 298.93M 386.75M
divided by
Net Income 52.56M 38.23M 46.79M 68.48M 96.92M 128.78M 162.33M 208.04M 232.57M 256.98M
Capital Expenditure Ratio 64.85% 100.95% 42.42% 44.08% 81.92% 39.33% 54.11% 67.55% 128.53% 150.50%

Inconsistent Dividend History over the past 10 years

UA has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - 2.93M
divided by
Shares Outstanding 49.96M 49.89M 50.65M 51.28M 52.53M 212.76M 215.96M 219.38M 220.87M 444.85M
Dividend Paid Per Share - - - - - - - - - 0.01
Price at Year End 42.46 23.46 27.87 55.14 71.79 47.42 86.95 68.33 80.96 25.17
Dividend Yield - - - - - - - - - 0.03%

History of Stock Buybacks over the past 10 years

UA has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 49.96M 49.89M 50.65M 51.28M 52.53M 212.76M 215.96M 219.38M 220.87M 444.85M
Stock Bought Back - 0.14% -1.50% -1.23% -2.37% -75.31% -1.48% -1.56% -0.67% -50.35%
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