Under Armour (UAA, UA) is an innovative company with a premium brand that has faced margin issues as a result of growing pains and a competitive athleisure marketplace. The company has begun to reverse these issues and is showing signs of a turnaround with improved margins. Given this, I think Under Armour’s stock has room to appreciate; however, don’t be surprised if there are selloffs on the way due to lack of execution as the company is seeing a possible risk in its DTC segment.

When Under Armour reported first-quarter 2019 results, the stock was rewarded by the market where the stock saw upside of 5% compared to pre-earnings. Both, revenue and GAAP EPS, surpassed analysts’ expectations. Revenue only grew 2% year-over-year, but the story was GAAP EPS of $0.05 when analysts expected $0.00. Excluding the impact of foreign currency headwinds, revenue grew 3% to $1.2 billion in Q1 2019. It has been a difficult recent history for Under Armour facing various headwinds that have really hit the stock price hard and have set expectations low. The past 2 quarters have signaled life to the Street and provided optimism for the rest of 2019 and beyond, but should investors be excited? Here’s a breakdown of the company’s first-quarter earnings:

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