Why Under Armour, Inc. (UAA) Is Susceptible To Wild Price Swings

Analysts at Atlantic Equities cut their rating on shares of Under Armour, Inc. (NYSE:UAA) from Neutral to Underweight in their opinion released on December 19. Telsey Advisory Group analysts again handed out a Market Perform rating to UAA stock but they lifted target price for the shares in a flash note to investors on December 13. The price target has been raised from $25 to $23. Telsey Advisory Group, analysts launched coverage of UAA stock with a Market Perform rating, according to their flash note to investors on December 13. Analysts at Wells Fargo issued an upgrade from Underperform to Market Perform for the stock, in a research note that dated back to November 30.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Under Armour, Inc. (NYSE:UAA)’s prospects. The earliest insider trade took place on 11/30/2018. Bergman David parted with a total of 2.5 thousand shares of company at average share price of $22. The total for the sales was set at $55 thousand. After this transaction, the CFO account balance stood at 157.67 thousand shares. The stock lost -10.59 percent since that insider sale. On 11/06/2018, Bergman David, CFO, sold 5 thousand shares at a price per share of $21.3. This removed 106.5 thousand shares from the insider’s fortune and the stock saw a -7.65 percent retreat in value since the news became public. This transaction left 160.17 thousand shares in the CFO account. On 08/22/2018, CFO Bergman David performed a sale transaction worth $99.45 thousand. This sale at $19.89 each has eliminated 5 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -1.11 percent decrease since the transaction was reported. The insider now is left with 165.17 thousand shares remaining in the account. Frisk Patrik, who performs the President & COO job, bought 14 thousand shares for $259 thousand. The acquisition occurred on 05/11/2018 was priced at $18.5 per share. The share price soared 6.32 percent since the reporting date. Frisk Patrik now left with a stake of 14 thousand UAA stock worth $275.38 thousand after the insider buying.

Under Armour, Inc. (UAA) is expected to jump by 3.76 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $30-month high price target. This represents a whopping 52.52 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $21, which represents a return potential of 6.76 percent when compared to the closing price of the stock of $19.67 on Friday, January 11. The lowest price target for the stock is $8 — slightly more than -59.33 percent from UAA’s current share price.

The shares are currently floating around the first support level of $19.21. Below this, the next support is placed in the zone of $18.75. Till the time, the UAA stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 52.71 on daily chart, which may remain a cause for concern. If the price breaks below $18.75 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $20 mark may result into a pull-back move towards $20.33 level.

UAA shares accumulated 0.47 points or 2.45 percent on Friday to $19.67 with a light trade volume of 4.969 million shares. After opening the session at $19.21, the shares went as high as $19.87 and as low as $19.08, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $8.24 billion and now has 418.67 million shares outstanding. Under Armour, Inc. (UAA) stock has lost -11.08 percent of market value in 21 trading days.

UAA stock has a trailing 3-year beta of 0.28, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.2 a share in the trailing twelve months. The stock’s value has surged 11.32 percent year to date (YTD) against a rise of 30.61 percent in 12 month’s time. The company’s shares still trade -21.19 percent away from its 1-year high of $24.96 and 57.36 percent up from 52-week low of $12.50. The average consensus rating on the company is 3.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Shares of Under Armour, Inc. (UAA) are trading at a P/E ratio of 35.08 times earnings reported for the past 12 months. The industry UAA operates in has an average P/E of 26.08. Its P/E ratio went as low as 20.71X and as high as 65.27 over the 5-year span. Further, it is sporting a 1.59 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.78. 44.6 percent is the gross profit margin for Under Armour, Inc. and operating margin sits at -1 percent. Along with this, the net profit margin is -2.7 percent.