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Under Armour's Sweating 1Q17, But Why?

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Under Armour's Sweating 1Q17, But Why? PART 1 OF 7

Under Armour’s Under Pressure: A 1Q17 Results Preview

Under Armour’s 1Q17 results preview

Baltimore-based Under Armour (UAA) is slated to report its results for the 1Q17 on Thursday, April 27, 2017, at 6:55 AM EST. These results relate to the three-month period that ended March 31, 2017.

During the last quarter of 2016, the company missed on both earnings and revenue estimates. UAA’s earnings fell 4% YoY (year-over-year) to 23 cents per share, missing the consensus estimate by 2 cents, while its revenues rose 12% YoY to $1.5 billion, missing the consensus estimate by ~$100 million.

Under Armour&#8217;s Under Pressure: A 1Q17 Results Preview

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For 1Q17, Wall Street has predicted a fall in UAA’s earnings to -$13.4 million, which would be the first time that the company has reported a net loss after being listed in 2004. Its EPS (earnings per share) would likely land at -$0.04 per share. UAA’s revenue is expected to rise 6% YoY to $1.41 billion, which would be the company’s slowest growth quarter.

ETF investors seeking to add exposure to UAA might consider the SPDR Consumer Discretionary Select Sector ETF (XLY), which invests 0.14% of its portfolio in UAA.

Valuations update and stock recommendation

UAA’s stock is currently trading at a one-year forward PE (price-to-earnings) ratio of 46x, as compared to its three-year average of 66x. The stock continues to trade at a premium to competitors Nike (NKE), Columbia Sportswear (COLM), and Lululemon Athletica (LULU), which are currently valued at 22.4x, 20.7x, and 22.1x.

The average 12-month price target by the 33 analysts covering Under Armour is $22.35, indicating an upside of ~16% over the next one-year period. As for recommendations, 27% analysts have issued a “buy” on the stock, while 55% have recommended a “hold,” and 18% have suggested a “sell.”

In this series

This series will give you a preview of UAA’s 1Q17 expected results. We’ll talk about the company’s recent financial performance, current valuations, stock market performance, and Wall Street’s recommendations.

Let’s start with revenue expectations.

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