The prime reason that Under Armour (UA, UAA) doesn't trade based on the P/E multiple is that the company has substantial margin upside. CEO Kevin Plank built a $5 billion revenue brand without placing much emphasis on operational efficiencies that the company is now implementing. The premium brand actually has margin upside potential above their biggest peer that would ultimately make the stock an incredible bargain at $20. My investment thesis remains very bullish on this turnaround at the premium athletic apparel brand.
More with Less
Under Armour has made great strides in improving product quality, especially in footwear. From Project Rock, to Curry 5s, to the Hovr platform, the company has learned the need to focus more on quality and the need to build market scarcity to drive purchase habits. These items regularly sell out on their website.
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