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Susquehanna Says Under Armour Now Worth $77/Share

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In a report published Wednesday, Susquehanna Group analyst Christopher Svezia previewed Under Armour Inc (NYSE: UA)'s upcoming first quarter results scheduled for April 21.

Svezia estimated the company will earn $0.04 per share in the quarter on revenue of $803.9 million. The Estimize Consensus estimate for earnings per share is $0.07 on revenue of $818.56 million, based on 46 estimates. The Wall Street consensus is calling for an earnings per share of $0.05 on revenue of $801.08 million.

Svezia noted that his sales estimate marks a 25.3 percent growth with footwear sales up 40 percent, apparel sales up 23 percent and accessories up 15 percent. However, higher marketing and one-time closing costs in the quarter will result in a "sharp" deleverage this quarter that will gradually decrease as the year progresses.

Svezia is also expecting a strong International start (+45 percent) to the new fiscal year after growing 96 percent last year on the heels of new market launches in Brazil, Chile, Southeast Asia and Middle East. The analyst added that Europe and China are nearing profitability, with Europe achieving profitability status during the fiscal year.

Finally, Under Armour owns the largest connected fitness platform through its acquisitions of Endomondo and MyFitnessPal. Svezia argued that the "wealth" of data the company will be able to track could lead to greater sales overtime through predictive analytics. However, for the time being, scalability poses a concern with increasing the user base as a focus.

Shares remain Neutral rated with a price target raised to $77 from a previous $71 as the analyst is taking a "wait-and-see approach."

Latest Ratings for UA

DateFirmActionFromTo
Feb 2018MaintainsNeutralNeutral
Jan 2017Initiates Coverage OnBuy
Nov 2016MaintainsHold

View More Analyst Ratings for UA
View the Latest Analyst Ratings

Posted-In: Athleisurewear Christopher Svezia Endomondo Estimize Fitness AppsAnalyst Color Price Target Analyst Ratings

 

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