preview

A Summary and Technical Analysis of the Under Armour, Inc. Essay

Good Essays

Abstract
Under Amour, Inc. is a performance based apparel company that is quickly growing to become one of the top companies in the industry. They are known for high-quality, innovative products that are giving athletes a competitive advantage. This paper describes the history of the company, analyzes the company’s performance and required rate of return, discusses the projected future growth rate of earning, values the company, and provides a recommendation to buy stock at the estimated price target of Keywords: stock analysis, return on equity, projected future growth rate, required rate of return, intrinsic value A Summary and Technical Analysis of the Under Armour, Inc. (UA) Stock on the New York Stock Exchange Under …show more content…

Although Under Armour has done well over the past few years, they face though competition from top players like Nike and Adidas. These larger companies have more resources and a greater presence in the international market. There is also a threat of new entrants, and since UA does not hold patents for its products, new and existing companies may begin to compete for a spot in the performance apparel market. Other threats include the company’s limited bargaining power (resulting from their diverse supplier base) and the leverage held by wholesale customers. Fortunately, UA does have the advantage of strong brand recognition, a reputation for innovative and high-quality products, and testimonials of world-renowned athletes, minimizing the threat of substitute products. Although the company was established more than fifteen years ago, Under Armour, Inc. continues to be in the growth phase of its life cycle. Revenues this quarter increased almost 23% year over year, and the Compound Annual Growth Rate (CAGR) for the last five years is about 24%. This is higher than the average quarterly revenue growth (Y/Y) of 8% for the apparel industry, and places UA above eight percent of its competitors. UA has also outperformed most of its competitors in quarterly Earnings Per Share (EPS) growth. With an EPS Growth (Qtrly YoY) of 166.7%, the company is ranked 5th of the 152 in the textile-apparel industry, as reported by Yahoo Finance. This past quarter the

Get Access