Under Armour Inc. (NYSE: UAA) is scheduled to release its first-quarter financial results before the markets open on Tuesday. Thomson Reuters has consensus estimates of a net loss of $0.06 per share and $1.12 billion in revenue. The same period of last year reportedly had a net loss of $0.01 per share on $1.12 billion in revenue.
This has been considered a down and out stock for so long now that it’s just hard for the company to get any traction, even with good news. The company’s latest earnings report may have seemed bad compared to its major growth days, and a charge against operations for a restructuring seems quite premature for this former high-flyer.
Numerous analysts have been tracked raising their price targets. Most of the ratings will seem quite muted, but investors need to understand that analysts felt burned for so long defending this company on the way down that they are going to be very reluctant to tell their clients to buy the shares. That being said, sometimes bottoms in stocks that have a history of disappointments see major recoveries in their shares, even when the overall news might still not seem all that great or that certain.
According to a research report by Wedbush:
Under Armour posted a fourth quarter sales beat on a conservative guide but issued a less bad than feared outlook that has its share of risks. In the fourth quarter, sales beat the conservative guide and gross margin was also better than expected. While the 2018 outlook was better than some feared, we see risk to its achievability in that it is pinned on improvement in the second half, amidst intenser competition and without a strong product offering to match. While encouraged that management addressed some of the topics in our recent deep dive report (including speed, SKU rationalization, etc), we await further evidence that the company is on track to inflect in North America and return to profitable growth.
Excluding Monday’s move, Under Armour had vastly underperformed all of the broad markets with its stock down about 18%. In 2018 alone, the stock actually is up close to 25%.
A few other analysts weighed in on Under Armour ahead of the report:
- Deutsche Bank has a Hold rating with a $14 price target.
- Canaccord Genuity has a Sell rating with a $9 price target.
- Credit Suisse has a Neutral rating with an $18 price.
- Stifel has a Buy rating with an $18 price target.
Shares of Under Armour were last seen up 1.5% at $18.10, with a consensus analyst price target of $14.28 and a 52-week trading range of $11.40 to $23.46.