Under Armour
Shares of hyper-growth athletic apparel company Under Armour (NYSE:UA) sold off in trading on Wednesday, 6/1, after the company cut its revenue guidance for the year. While it is tempting to buy into this high-growth story on the dip, we warn investors a rich valuation implies there isn't much upside here. Under optimistic assumptions, we think fair value is roughly in-line with current market value. While we do not think the stock is a good short here, we also do not think there is much upside.
It seems everyone likes to compare Nike (NYSE:NKE) to UA, and with the NBA Finals kicking off this week in what will be a showdown of NKE and UA's poster-boys, it only seems fitting we analyze UA as an up-and-coming NKE. Overlaying UA and NKE's revenue graphs leaves little doubt that UA is still in the early innings of its growth story, as the revenue ramp seems to be in the early stages.
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