Under Armour, Inc. (UA) has posted huge gains in the last year, recently hitting a new all-time high on a 21% earnings surprise. That and bullish estimates have this Zacks #1 Rank stock running with momentum.
Company Description
Under Armour, Inc. develops and sells a line of performance athletic apparel and footwear for men, woman and children primarily in the United States and Canada. The company was founded in 1996 and has a market cap of $4.03 billion.
Under Armour has been a strong performer in 2011, recently hitting a new high after reporting solid Q1 results in late April that included a 21% earnings surprise.
First-Quarter Results
Revenue for the period was up 36% from last year to $313 million. Earnings also looked good, coming in at 23 cents, 21% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 47% over the last four quarters.
The company saw big gains from its direct-to-consumer channel, where sales were up 53% from last year. Accessories also saw a huge jump in sales, climbing 213% to $23.5 million.
Financial Profile
Although Under Armour’s cash and short-term investments fell $55 million to $111 million, it still has a great balance sheet with only $14 million in total debt.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 8 cents to $1.74. The next-year estimate looks good too, pegged at $2.17, a bullish 25% growth projection.
Valuation
In light of recent gains, the valuation picture does look a bit pricey, with UA’s forward PE of 44.5X a premium to its peers and the overall market.
12-Month Chart
On the chart, UA recently hit a new all-time high. Look for support from the trend line an any weakness. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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