Consumer Products

Is Under Armour the Ultimate Earnings Underdog?

Under Armour Inc. (NYSE: UAA) is scheduled to release its most recent quarterly results before the markets open on Tuesday. The consensus estimates are calling for $0.10 in earnings per share (EPS) and $1.47 billion in revenue. The same period of last year reportedly had $0.09 in EPS and $1.39 billion in revenue.

Under Armour was one of the hottest apparel brands for years. It ran into another wall in 2019, after stumbling for several years. Revenue fell marginally in the most recent quarter, and EPS was higher at $0.23 than the prior year’s $0.17. Yet, the company revised forecasts downward for the rest of the year. To make matters worse, the company has disclosed an investigation into its accounting practices.

However, this quarter will be the first with the new chief executive, Patrik Frisk, at the helm. He is taking over for Kevin Plank who founded the company in 1996 and served as CEO and board chair since that time. Although Frisk only joined the Under Armour team in 2017, he has nearly 30 years of experience in the apparel, footwear and retail industry.

Keep in mind that Frisk only took over on January 1, 2020. So while this quarter may not be entirely reflective of him in this new role, he’s been involved in the transition and investors can look forward to his new perspective and, potentially, a direction going forward.

Under Armour stock has underperformed the broad markets with a gain of less than 1% in the past 52 weeks. However, in just the past quarter alone, the stock is up over 11%.

Here’s what analysts had to say ahead of the report:

  • Morgan Stanley has an Equal Weight rating and a $23 price target.
  • Pivotal Research’s Hold rating comes with a $21 target price.
  • BMO Capital Markets rates it at Underperform with an $18 price target.
  • Piper Sandler has an Overweight rating with a $27 price target.
  • JPMorgan has a Neutral rating and a $23 price target.

Shares of Under Armour traded at $20.39 on Monday, in a 52-week range of $16.74 to $27.72. The consensus price target is $21.50.