21.16 0.00 (0.00%)
After hours: 6:06PM EST
|Bid||21.16 x 1100|
|Ask||21.38 x 3200|
|Day's Range||20.94 - 22.24|
|52 Week Range||15.60 - 24.96|
|Beta (3Y Monthly)||0.64|
|PE Ratio (TTM)||N/A|
|Earnings Date||May 2, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||21.08|
Shares of Nike (NYSE:NKE) have been sprinting higher, giving investors a good old case of the FOMOs (fear of missing out). Hindsight is 20/20 of course, but investors had a terrific opportunity to gobble up Nike stock in late-December, right as the overall market was capitulating."Well duh, we had a great chance to buy almost every stock in late-December, Bret."Obviously most stocks were under pressure as the markets tumbled into the Christmas holiday, but NKE stock was a unique situation. That's because the company just turned in a strong fiscal-second quarter earnings report on Thursday, Dec. 20. The market bottomed on Monday, Dec. 24, was closed the next day and started its surge on Dec. 26.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Hot Stocks Leading the Market's Blitz Higher Of course the market completely ignored this common-sense rationale and slammed Nike stock lower with the rest of the Dow. But longer term investors with an ounce patience recognized the situation for what it was: A buying opportunity. Lacing Up with Nike StockLast quarter, earnings of 52 cents per share came in seven cents a share ahead of expectations. Revenue of $9.37 billion topped estimates by $200 million and grew 9.6% year-over-year (YoY).Aside from a top- and bottom- line beat, gross margins topped consensus estimates while inventories decreased YoY. Growth and margin expansion were led by Nike's direct-to-consumer business.Overall, it was a strong quarter for the company and that's when investors should have been jumping all over NKE. Worth noting, the company is almost done with its four-year $12 billion share buyback plan. That means Nike will soon embark on its four-year $15 billion buyback plan.Over the last few days, shares have been getting an extra boost. That's as a potential trade deal between China and the U.S. is growing increasingly likely. That's a plus for Nike, which does considerable business in China. But shares have also been on the move following an earnings and revenue beat and solid outlook from Under Armour (NYSE:UAA, NYSE:UA).That gives Nike stock investors confidence that it's business as usual for the king of sports apparel.As it stands, analysts expect Nike to earn $2.65 per share this year, 11% growth from fiscal 2018. In fiscal 2020 (next year, but begins in two quarters), expectations call for 18.5% earnings growth. Further, forecasts call for 7.8% revenue growth in both years.That's a solid growth profile if Nike can achieve it. Even more so, if the company can accelerate its earnings growth in the significant manner that analysts currently expect, it will represent growing profitability and give investors one more reason to justify buying the stock. Trading NKE Stock Click to EnlargeThere's a difference between a broken stock and a broken company. The former, like Nike in December, is a company with strong fundamentals but a stock is disarray. The latter adds fundamental turmoil to the situation.So the question is, can Nike stock get to $100 a share? According to Oppenheimer analysts' new price target, the answer is yes. "We have turned even more impressed with the underlying operating prowess of the company and its brand," the analysts said, noting that margins should continue to improve.NKE stock is coming in hot to its prior highs. As such, shares sport an RSI reading of 76 (green circle), suggesting an overbought condition. This isn't a reason to sell the stock, but it is a consideration on waiting for a pullback and/or some consolidation.Is it possible that Nike powers through resistance to new highs and becomes even more overbought in the short term? Of course! My thought is that we'll eventually get a trade deal with China, but I would be surprised if don't get some negative headlines first. Something like, "Trade Deal in Jeopardy," or "U.S.-China Trade Talks Stall."That could send Nike and a host of others into a pullback and that could be our buying opportunity. As it stands, I'm waiting on Nike stock. But a trade deal coupled with a breakout over $86 could send NKE stock to $100 this year.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best ETFs You Can Buy * 7 Reasons Stock Buybacks Should Be Illegal * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? Compare Brokers The post Nike Stock Is Set to Surge to $100 Sooner Than You Think appeared first on InvestorPlace.
Under Armour Inc NYSE:UAAView full report here! Summary * ETFs holding this stock have seen outflows over the last one-month * Bearish sentiment is moderate and declining Bearish sentimentShort interest | NeutralShort interest is moderately high for UAA with between 10 and 15% of shares outstanding currently on loan. However, this was an improvement in sentiment as investors who seek to profit from falling equity prices reduced their short positions on February 13. Money flowETF/Index ownership | NegativeETF activity is negative. Over the last one-month, outflows of investor capital in ETFs holding UAA totaled $14.69 billion. Additionally, the rate of outflows appears to be accelerating. Economic sentimentPMI by IHS Markit | NeutralAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Goods sector is rising. The rate of growth is weak relative to the trend shown over the past year, however. Credit worthinessCredit default swapCDS data is not available for this security.Please send all inquiries related to the report to firstname.lastname@example.org.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Accelerating wage increases are putting pressure on profits, but Goldman Sachs finds that these companies are positioned to maintain their margins.
A combination of factors is helping push U.S. equities to fresh highs, with the Dow Jones Industrial Average rising to levels not seen since early December on Wednesday.These include hopes of a U.S.-China trade deal (with President Trump reportedly pushing back a tariff deadline), optimism over a budget deal in Congress (hopefully avoiding another government shutdown) and ongoing ease with the Federal Reserve's newly dovish stance.The bulls are going from strength to strength, shifting the focus of their buying as the post-December uptrend matures and changes its nature. From a focus on beaten-down big-cap technology stocks, new areas are piquing the interest of value hunters in areas like energy, industrials and healthcare.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 10 Best ETFs You Can Buy With that in mind, here are 10 hot stocks to watch as they lead the market higher: Philips 66 (PSX)Energy stocks like Philips 66 (NYSE:PSX) are coming back to life as crude oil starts to stir, with shares breaking out of a two-month resistance range as the 20-day moving average extends a rise above the 50-day average. Shares were recently upgraded by analysts at Tudor Pickering.The company will next report results on May 10 before the bell. Analysts are looking for earnings of $1.1 per share on revenues of $24.7 billion. When the company last reported on Feb. 8, earnings of $4.87 beat estimates by $1.98 per share on revenues of nearly $29 billion. Hess (HES)Hess (NYSE:HES) is another energy stock to watch, with shares moving to challenge the 200-day moving average to cap what looks like an inverse head-and-shoulders reversal pattern that traces a move to back to the early October high near $75. The company, along with ExxonMobil (NYSE:XOM) recently announced positive results from two offshore wells in Guyana. * 10 'Buy-and-Hold' Stocks to Own Forever The company will next report results on May 1 before the bell. Analysts are looking for a loss of 21 cents per share on revenues of $1.59 billion. When the company last reported on Jan. 30, a loss of 31 cents per share beat estimates by 7 cents on a 30.3% rise in revenues. AMD (AMD)AMD (NASDAQ:AMD) shares are consolidating a recent breakout, with the 20-day moving average extending away from its 50-day and 200-day moving averages presaging a break of prior highs and a challenge of the September levels. This would be worth a gain of more than 50% from here. In its most recent quarter, despite weak guidance from management, investors focused on a 9% increase in revenues for its computing and graphics segment thanks to a ramp in its Ryzen processors.The company will next report results on April 30 after the close. Analysts are looking for earnings of 2 cents per share on revenues of $1.25 billion. When the company last reported on Jan. 29, earnings of 8 cents per share matched estimates on a 5.9% rise in revenues. Microsoft (MSFT)Microsoft (NASDAQ:MSFT) shares look ready to emerge from a sloppy looking downward channel that started back in October with a break above a resistance line near $108. Such a break would set up a challenge of the early December high near $112, which would be worth a gain of 5% from here. * 10 Stocks That Every 20-Year-Old Should Buy The company will next report results on April 25 after the close. Analysts are looking for earnings of $1 per share on revenues of $29.9 billion. When the company last reported on Jan. 30, earnings of $1.10 beat estimates by a penny on a 12.3% rise in revenues. General Dynamics (GD)General Dynamics (NYSE:GD) shares are holding steady above their 20-day and 50-day moving averages, setting up a run at the prior highs near $185, which coincides with the 200-day moving average. Defense stocks have constantly been listed as hot stocks amid fresh tensions with Iran and steady budgetary support from the Trump White House and Congress.The company will next report results on May 1 before the bell. Analysts are looking for earnings of $2.45 per share on revenues of $9.3 billion. When the company last reported on Jan. 30, earnings of $3.07 per share beat estimates by 8 cents on a 25.4% rise in revenues. Deere (DE)Deere (NYSE:DE) is strongly tied to the fate of U.S.-China trade negotiations, given its focus on heavy machinery as well as agriculture equipment used for U.S. food exports. As such, shares are consolidating near prior highs set in early 2018. Watch for an upside breakout following the release of confidence guidance from management. * 7 Reasons to Own Coca-Cola Stock The company will next report results on Feb. 15 before the bell. Analysts are looking for earnings of $1.8 per share on revenues of $6.9 billion. When the company last reported on Nov. 21, earnings of $2.30 per share missed estimates by 15 cents on a 17.6% rise in revenues. DR Horton (DHI)DR Horton (NYSE:DHI) shares have climbed back up and over their 200-day moving average, setting the stage for a sustained move to test the prior high set in August. In its most recent post-earnings call, management noted that buyer traffic remained strong -- raising hopes for a strong spring selling season.The company will next report results on April 26 before the bell. Analysts are looking for earnings of 86 cents per share on revenues of $4 billion. When the company last reported on Jan. 25, earnings of 76 cents per share missed estimates by a penny on a 5.6% rise in revenues. Johnson & Johnson (JNJ)Johnson & Johnson (NYSE:JNJ) shares are extending above their 50-day and 200-day moving averages, looking ready for a run at the prior highs as worries about a baby powder lawsuit fade. The company recently unveiled a plan to buy robotics company Auris Health for roughly $3.4 billion. * 7 Reasons Stock Buybacks Should Be Illegal The company will next report results on April 23 before the bell. Analysts are looking for earnings of $2.1 per share on revenues of $19.7 billion. When the company last reported on Jan. 22, earnings of $1.97 per share beat estimates by 2 cents on a 1% rise in revenues. Under Armour (UAA)Under Armour (NYSE:UAA) shares have bounded above their 200-day moving average to close in on levels not seen since early December, capping a rise of 33% from its recent lows. While shares remain mired in a three-year-old sideways range, watch at the very least for a retest of prior channel highs near $24, which would be worth around a 10% gain from here.The company will next report results on May 14 before the bell. The company last reported results on Feb. 12, with earnings of 9 cents per share beating estimates by 5 cents on a 1.5% rise in revenues. The company remains in turnaround mode here at home, with revenues falling 6% in North America in the most recent quarter. But international growth remains a bright spot, up 24%. Freeport-McMoRan (FCX)Shares of Freeport-McMoRan (NYSE:FCX) are looking ready to emerge from a multi-month basing pattern going back to October, with the 20-day moving average extending a move above its 50-day moving average as the new uptrend gains momentum. The company was recently upgraded by Morgan Stanley analysts citing expectations that the company is likely to see an earnings boost from higher copper prices. * 7 Athletic Stocks That Could Run Higher The company will next report results on April 23 before the bell. Analysts are looking for earnings of 10 cents per share on revenues of $3.8 billion. When the company last reported on Jan. 24, earnings of 11 cents per share missed estimates by 8 cents on nearly a 27% drop in revenues.As of this writing, William Roth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post 10 Hot Stocks Leading the Market's Blitz Higher appeared first on InvestorPlace.
Growth was roughly split between Wholesale and Direct-to-Consumer, with DTC accounting for 41% of the business in Q4 (for the year, DTC accounted for 35% of UA's revenues). North America struggled as expected, with revenues contracting 6% year-over-year (well below the high-single digit growth that Nike (NKE) has reported in North America in recent quarters). As a result of this discrepancy, International continues to represent a larger piece of Under Armour's business, accounting for 30% of revenues in the fourth quarter.
In this updated daily bar chart of UAA, below, we can see a broad sideways trading range market but recently the chart has gotten stronger. Volume really jumped and this has turned the On-Balance-Volume (OBV) line up and close to a new high. A new high in the OBV line would be leading the price action.
Under Armour Inc (NYSE: UAA ) shares rose after the apparel maker reported a surprise fourth-quarter earnings beat . Still, several Wall Street analysts said in research reports that they're are unconvinced ...
Under Armour says its North American business has stabilized after revenue declines, and inventory control is key for 2019.
Margins could be turning around at (UAA) and that could be enough to keep driving the stock higher, UBS’s Jay Sole says. The company reported better-than-expected earnings Tuesday of nine cents per share and $1.39 billion of revenue, which sent Under Armour stock (UAA) up 8%, continuing a rebound. The Canaccord analyst noted ahead of Under Armour’s earnings that sales at the company’s main competitors—Adidas (ADS.Germany), (LULU) (LULU), and (NKE) (NKE)—are growing three to five times faster than at Under Armour.
Shares of Under Armour (NYSE:UAA) rose sharply on Tuesday after the athletic apparel company reported healthy fourth-quarter numbers which topped revenue and profit expectations. UAA stock price rose 10% on the day and is already giving back some of those gains this morning.Source: Shutterstock UAA stock is now up more than 80% since bottoming out around $12 in late 2017. Some bulls are pounding on the table and saying recent numbers underscore that this big Under Armour turnaround is only halfway done. The numbers actually say otherwise. At its core, Under Armour is an athletic apparel company with staying power in the secular growth athletic apparel industry. But the company is also losing relevance and popularity within that industry. The competition is only getting bigger and better, and Under Armour isn't adapting quickly enough. As such, this will remain a slow revenue growth company with depressed margins for the foreseeable future. * The 7 Best Video Game Stocks to Power Up Your Portfolio! At $22, Under Armour stock is fully priced considering that bleak reality. Potential upside into the end of the year looks limited, and this rally (much like previous rallies towards $25) will likely end with a big drop toward $20.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's a drop worth buying. Until then, the best thing to do with UAA stock is stay away as it closes in on $25. Under Armour's Numbers Weren't That GoodBulls want to rally around the headline Q4 double beat. But, underneath that headline, there were some serious problems with Under Armour's numbers in the quarter. Those problems include: * Revenue growth was just 3% in the quarter, 4% for the year, and expected to be 3.5% next year. Those aren't very strong growth rates, especially for a company with broad exposure to the rapidly growing athletic apparel space. They also don't scream "big turnaround is coming". Instead, with revenue growth set to cool next year, they actually imply that this turnaround is on its last legs. * North America revenues dropped 6% in the quarter. That ends a multi-quarter streak of North America business stabilization, and implies that this business will continue to struggle for the foreseeable future. * While gross margins are expected to rise by 70 basis points next year, the operating profit guide implies less than 70 basis points of expansion on the operating margin line. That's a big hit on the long-term margin expansion narrative, since without falling opex rates, it will be tough for gross margin expansion alone to drive operating margins materially higher in the long run.Overall, while Under Armour's Q4 numbers and fiscal 2019 guide weren't bad, they weren't good either. If anything, they indicate that this company is stabilizing, but that the big turnaround has already happened. Fundamentals Limit UpsideThe model for Under Armour isn't terribly hard.The athletic apparel market globally is growing at a steady 7% annualized rate. Under Armour, a sub-5% revenue growth company, is losing share in that market, and will continue to lose share given the company's inability to transform into a lifestyle brand and penetrate the athleisure market at scale. As such, Under Armour will remain a sub-5% revenue growth company for the foreseeable future.Gross margins will continue to trend higher as the company pushes DTC sales and gets product back into full price distribution channels. But, the lack of opex leverage expected in 2019 is problematic. Opex rates will fall over time. But, not by that much since revenue growth won't be that big. Thus, we are talking slight gross margin expansion and slight opex leverage for the foreseeable future.Overall, Under Armour can probably continue to grow revenues by 4-5%, and improve operating margins to 10% by fiscal 2024.Under those assumptions, $1.30 in EPS seems achievable by fiscal 2024. Based on a Nike (NYSE:NKE) average 25 forward multiple, that equates to a 2023 price target of $32.50. Discounted back by 10% per year, that equates to a fiscal 2019 price target for UAA stock of about $22.Thus, as UAA stock closes in on $25, upside into the end of the year looks limited. Bottom Line on UAA StockUnder Armour is a fine company in a great industry. But, the stock price currently reflects optimism that things will get better. They won't. At best, Under Armour defends its position, and operations stabilize. At worst, competition continues to eat away at Under Armour, and things get worse. * 9 U.S. Stocks That Are Coming to Life Again Consequently, this current rally towards $25 will -- much like prior rallies to $25 -- ultimately end in disappointment for bulls.As of this writing, Luke Lango was long NKE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 7 Forever Stocks to Buy for Long-Term Gains * 5 Self-Driving Car Stocks to Buy Compare Brokers The post Why Under Armour Stock Won't Hit $25 appeared first on InvestorPlace.
Though a challenging competitive environment continues to weigh on sales, efforts to make Under Armour more profitable are paying off.
The bulls came back to the table in a big way on Tuesday, slightly more convinced there's less risk of another government shutdown, and slightly more convinced the tariff war will eventually come to a close. All told, the S&P 500 gained 1.29% on Tuesday, though it still hasn't hurdled some key technical resistance.It wasn't terribly familiar names leading the charge though. Apple (NASDAQ:AAPL) was a relative no-show, and General Electric (NYSE:GE) stumbled again.Setting the tone, and the pace, were names like Vale (NYSE:VALE) and Activision Blizzard (NASDAQ:ATVI). Vale jumped 5.6%, snapping back from a pretty severe beatdown following news that a dam break in Brazil could crimp output as well as turn into a massive legal liability. Activision, meanwhile, only bounced on Tuesday after being trounced on Monday in front of Tuesday's post-close earnings report. As it turns out, the doubters were right to be concerned.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe disparity between the daily winners and the daily losers seems to be widening, in some ways helping identify where the strength and weakness is, but in other ways imposing dangerous volatility. The stock charts of Under Armour (NYSE:UAA), Lennar (NYSE:LEN) and Qualcomm (NASDAQ:QCOM) appear to be developing trends that circumvent that volatility, though in all three cases a little more needs to happen before a budding trend is gelled. Qualcomm (QCOM)Qualcomm shares have made a little forward progress so far in February. But, given its pullback in January in an environment that was decidedly bullish for most other stocks, it would be easy to think nothing of it. * Buy These 5 Stocks to Play the Megatrend of the Century There may be more at work than seems on the surface, though. Last month's low was suspiciously familiar. Click to Enlarge • It's only evident on the weekly chart, but the January low around $49 so far looks to be a triple bottom, marked with a yellow dashed line. Qualcomm found a floor there twice before, going back to 2017.• If this rebound effort takes hold -- and that's a big "if" -- keep a close eye on all the moving average lines plotted on the daily chart. Each has played a support and resistance role at some point in recent months, and will likely do so again. Lennar (LEN)Last year was a miserable one for Lennar shareholders. Against a backdrop of fears that rising interest rates would up-end the housing construction market (to the extent unaffordable housing wouldn't), LEN shares fell from a January 2018 peak of $72 to a December low of $37. To that end, any strength seen from then could be easily chalked up as a dead-cat bounce.The reversal since late last year, however, just took on a completely different complexion. Though more up-and-down movement is certainly in store, LEN just broke above a key technical ceiling that could -- and should -- trigger higher highs. Click to Enlarge • The line in the sand is the 200-day moving average, plotted in white on both stock charts. The rally effort was quelled there a couple of weeks ago, but the second effort on Tuesday got the job done.• Underscoring yesterday's compelling move is the volume behind it, and the fact that it was prompted by a push up and off the blue 20-day moving average line.• While it's the less likely outcome from here, there's a chance Lennar shares could complete the head-and-shoulders pattern evident on the weekly chart. A break above the neckline, plotted with a yellow dashed line, could inspire a meltup. Under Armour (UAA)Traders have seen big one-day jumps from Under Armour shares before, most of them to no avail. That is, though firmly bullish, those jolts didn't jump-start prolonged rallies.Yesterday's jolt is built a bit differently, however. The near-7% gain overcome a rough start to form a couple of different bullish signals, all in one shot. Click to Enlarge • One of those bullish clues is Tuesday's engulfing action, where the open and close were below and above, respectively, the prior day's high and low. That sweeping intraday change of heart points to the sentiment surrounding the stock.• The shape and placement of the bar is also noteworthy. The bears had a chance to put UAA into a nosedive at the opening following its solid fourth-quarter report, but the buyers pushed back harder.• While a new rally may be underway, the $24.60 area has already been established as a ceiling. That's where Under Armour shares peaked a couple of different times last year.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Every 20-Year-Old Should Buy * 10 Best Dividend Stocks to Buy for the Next 10 Months * 10 Monster Growth Stocks to Buy for 2019 and Beyond Compare Brokers The post 3 Big Stock Charts for Wednesday: Qualcomm, Under Armour and Lennar appeared first on InvestorPlace.
Under Armour (NYSE:UA, NYSE:UAA) shares moved higher after the company's earnings report on Feb. 12. Both classes of Under Armour stock gained. As of this writing, UA shares are up 6% and UAA stock is higher by 7.4%. Click to Enlarge Source: Shutterstock The divergence in performance adds to the long-running -- and still unexplained -- valuation gap between UA and UAA shares. But the fact that both classes of Under Armour stock have rallied itself is odd. Q4 earnings were solid, admittedly. But guidance for 2019, which should matter more to a forward-looking market, was left unchanged.With UAA stock already up 18% before earnings, the report hardly seems strong enough for more upside. And it leaves Under Armour stock, which I thought was a sell in December, in a precarious position going forward.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Under Armour Stock Rises After EarningsIn terms of expectations, Under Armour earnings admittedly look solid. Adjusted earnings-per-share of 9 cents was 5 cents better than consensus of 4 cents, and a noted improvement from a breakeven performance the year before. Revenue rose 1.5% to $1.39 billion, about $10 million ahead of the Street. * The 7 Best Video Game Stocks to Power Up Your Portfolio! Expectations aside, however, the performance is hardly impressive. Sales in North America dropped 6% year-over-year in Q4, driving a full-year 2% decline in that market. Given that Nike (NYSE:NKE) has executed a dramatic reversal in its North American business, Under Armour is clearly losing share domestically. Questions persist surrounding the company's retail strategy of selling full-price at outlets like Dick's Sporting Goods (NYSE:DKS) and at a discount at Kohl's (NYSE:KSS).There is good news, admittedly. International sales continue to grow nicely. Those markets -- now about a quarter of total revenue -- are key to the long-term strategy. And Under Armour is recovering some of the margins it has lost in recent years, with its adjusted gross margin up 160 bps in Q4.Bulls, then, can argue that Under Armour's turnaround is progressing. That's actually true. But to at least some extent that's already priced in. And looking at guidance for 2019, it's a surprise that Under Armour stock has continued to rally. Guidance and UAA StockAt its Investor Day in December, Under Armour laid out five-year targets for its turnaround. The market wasn't impressed. Under Armour stock had already fallen heading into the report, and it continued plunging afterward. The two declines combined led Under Armour stock down 30% in less than three weeks.Obviously, broad market weakness in December didn't help. But even considering a notable change in sentiment for the market as a whole, the rally in UAA stock on Wednesday made little sense. The stock already had recaptured much of those losses, but little changed in the story on Wednesday looking forward. The 2019 outlook was reaffirmed. Under Armour still sees EPS of just 31 cents to 33 cents this year, implying a 67x price-to-earnings ratio (on the high-end of guidance) for UAA stock.That single metric doesn't make Under Armour stock a sell. But the rally of the past few weeks does seem confusing and potentially unsustainable. It was the long-term outlook in December that spooked investors. That outlook suggests something like $1 in EPS in 2023. Yet UAA stock now trades at 22x that long-term figure. * The 3 Best Chinese Stocks to Buy for a Long-Term Portfolio More notably, UAA now has recaptured all of the post-Investor Day selloff. That seems like too much. Luke Lango wrote at the time that the outlook confirmed that $20 was too much to pay for UAA stock. The stock now is over $22. What drives more upside? The Risks to UA and UAAThe aggressive move in UA and UAA of late creates two key risks. The first is that in 2019, Under Armour now has to outperform. If five-year targets weren't enough in December, and they haven't changed since, then investors are pricing in better-than-expected results. Any quarter going forward that isn't a big beat is likely to lead to a selloff in Under Armour stock.The second risk is that UAA stock also looks reliant on broad market trends. What is now a 26% rally year-to-date is coming solely from the fact that investors are more bullish in 2019 then they were at the end of 2018. When that bullishness fades -- or again reverses -- UAA will be left in a precarious position.Again, this is not to say that there's no good news in Under Armour earnings. The turnaround is on track. International sales and margin expansion are key parts of the story.But this is also a company losing market share in North America, where revenues in 2019 are expected to be flat and its stock is trading at 60x+ 2019 earnings. A turnaround of some kind is already priced in. From these levels, for UAA to gain, the progress needs to accelerate. And it's not clear why investors see the Q4 report as evidence that acceleration is on the way.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Every 20-Year-Old Should Buy * 10 Best Dividend Stocks to Buy for the Next 10 Months * 10 Monster Growth Stocks to Buy for 2019 and Beyond Compare Brokers The post Under Armour Stock Rallies After Earnings … But Why? appeared first on InvestorPlace.
Shares of Under Armour (UAA) surged nearly 7% Tuesday after the company surpassed fourth-quarter earnings and revenue estimates. Now let's break down the sportswear company's Q4 results and see what might be next for Under Armour stock.
Under Armour’s turnaround plan is looking like the plan that will never end. On Tuesday, the sportswear company reported fourth-quarter earnings of 9 cents a share and revenue of $1.39 billion. International sales, which now account for 28% of total revenue, provided a brighter spot, climbing 28%.
Under Armour Inc. reported flat revenue in the holiday quarter, as strong gains overseas offset declines in North America and in its footwear business. The sportswear company has been restructuring its operations to cut spending and inventories as well as reduce promotions after demand for its apparel and sneakers slowed in recent years. Total revenue rose 1.5% to $1.39 billion, including a 6% decline in North America and a 24% increase overseas.
Wall Street rallied on Tuesday as investors were heartened by a tentative congressional spending deal to avoid another partial federal government shutdown and by optimism surrounding U.S.-China trade negotiations. The S&P 500 ended the session above its 200-day moving average for the first time since early December. President Donald Trump said he would be willing to let the March 1 tariff deadline slide as top U.S. officials arrived in Beijing for high-level talks later in the week to hammer out a solution to the trade dispute between the world's two largest economies.
Lululemon Athletica is IBD Stock of the Day, breaking out Tuesday from a bullish base. The yoga apparel maker joins athletic apparel rivals Nike and Under Armour.