UA  Under Armour Inc.

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Apparel

Market Cap.

8.69B

Vuru Grade

39.13/100

Current Price

$19.83
+0.19 (+0.97%)

Growth Price

$3.43
Overvalued by 82.72%

Stability Price

$5.63
Overvalued by 71.63%

Company Metrics

  • P/E 44.16
  • P/S 1.78
  • P/B 4.23
  • EPS 0.45
  • Cash ROIC 3.91%
  • Cash Ratio 0.37
  • Dividend 0 / 0%
  • Avg. Vol. 4.68M
  • Shares 438.22M
  • Market Cap. 8.69B

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

Buy Under Armour Inc (UAA) Stock While the World Hates It
Investorplace.com - Feb 24, 2017
Often, the best time to load up on a stock is when everyone hates it, and right now everyone hates Under Armour Inc (NYSE:UAA).
What Lies Ahead for Under Armour Inc After Its Disappointing Earnings Report
Motley Fool - Feb 14, 2017
In this Market Foolery segment, Mac Greer welcomes Andy Cross and Matt Argersinger to the show to talk about what went wrong last quarter for Under Armour (NYSE:UA) (NYSE:UAA) as a tepid holiday season plagued the brick-and-mortar retailers that ...
5 Signs Under Armour Inc. Needs New Management
Motley Fool - Feb 9, 2017
The past few quarters have been rough for Under Armour (NYSE:UA) (NYSE:UAA), the former high-growth darling of the sportswear and footwear industry.
Should Under Armour Inc (UAA) CEO Kevin Plank Step Aside? - Nasdaq
Stephen Curry has pointed reaction to Under Armour CEO's praise for Trump - MarketWatch
3 Reasons Investors Should Steer Clear of Under Armour Inc (UA) Stock
Investorplace.com - Feb 23, 2017
Athletic apparel maker Under Armour Inc (NYSE:UAA, NYSE:UA) has had a tough few months. The firm's most recent earnings report showed that the company's margins declined significantly and management's forward guidance for UAA stock was lackluster.
Analyst's Predictions on Under Armour, Inc. (UAA), Under Armour, Inc. (UA) - StockNewsJournal
The Mizuho Reaffirmed Buy Rating for Under Armour Inc. (UAA) - DailyQuint
Better Buy: Under Armour Inc. vs. Adidas
Motley Fool - Feb 4, 2017
Over the past few years, Under Armour (NYSE:UAA) (NYSE:UA) was considered the hot growth stock in sportswear and footwear, while Adidas (NASDAQOTH:ADDYY) was frequently dismissed as a "mature" play with limited growth potential.
4 Reasons To Avoid Under Armour Inc. Stock
Motley Fool - Feb 3, 2017
Shares of Under Armour (NYSE:UA) (NYSE:UAA) recently plunged to multi-year lows after the footwear and apparel maker posted a big fourth quarter earnings miss and dismal guidance for the first quarter.
Under Armour - Closing The Short, Taking A Victory Lap - Seeking Alpha
2 Convincing Reasons Baird Thinks You Should Stick With Under Armour - Benzinga
Can Under Armour Make a Comeback?
Investopedia - Feb 22, 2017
Under Armour Inc. (UAA) has seen it stock drop off drastically over the recent one-month period, caused by myriad factors centered around its slowing growth.
Why Under Armour Inc. Shares Dove 28% in January
Motley Fool - Feb 7, 2017
Gross profit margin sank by 4 percentage points to 45% of sales. That was enough to keep Under Armour just above Nike on the metric, but the gap is closing fast.
Under Armour, Inc. Disappoints With a Tough Quarter
Motley Fool - Jan 31, 2017
Under Armour (NYSE:UA) (NYSE:UAA) released weaker-than-expected fourth-quarter 2016 results Tuesday morning, as last quarter's weakness in the North American apparel market intensified.
Why Under Armour Inc (UA) Stock Could Be Screwed - Investorplace.com
Under Armour Shares Slump on Earnings Miss - Fox Business
Leave Under Armour Inc (UAA) Stock for Dead
Investorplace.com - Feb 21, 2017
As far as I'm concerned, Under Armour Inc (NYSE:UAA) has one major thing going for it: brand name. Beyond that, I see no difference between UAA products and those of any other sportswear provider.
Taking a Look at the Data Behind Under Armour, Inc. (UAA) - StockNewsJournal
The Under Armour, Inc. (UAA) Cut to Hold at Canaccord Genuity - DailyQuint
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.

$19.83 Current Price

$3.43 Growth Price (DCF)

Overvalued by 82.72%


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

$5.63 Stability Price (EPV)

Overvalued by 71.63%


Discount Rate: 15.0%

$0.80 NCA Price

Overvalued by 95.95%

$39.48 Book Price

Undervalued by 99.11%


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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