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Under Armour: Analysts Weigh in on Superstar Quarter

NEW YORK (TheStreet) -- If Under Armour (UA) wasn't on the radar, it will be now after breezing past fourth-quarter expectations and leaving other retailers in the dust.

On Thursday, the sports apparel stock managed to charge past the $100-mark, closing at $104.76. Shares have added 2.9% to $107.79 by midday Friday.

Over the fourth quarter, Under Armor recorded fourth-quarter revenue of $683 million and net income of 59 cents a share. Analysts polled by Thomson Reuters had expected earnings of 53 cents a share on $620 million in revenue.

The company raised its 2014 revenue outlook to a range of $2.84 billion to $2.87 billion, handily beating consensus of $2.77 billion.

Bryan Ashenberg, analyst for premium service Breakout Stocks, noted the impressive earnings win is indicative of a smart company set to move higher.

"The company continues to position itself to benefit from the tailwinds of cold weather and upcoming international sporting events, while also carving out a bigger presence in clothing for women and young people," he wrote in a report Thursday morning.

Under Armour also remains one of Jim Cramer's favorite shares, a "stealth technology" stock set for a win.

"This Baltimore-based apparel company is rolling out new products literally quarterly, with properties that keep you warm or monitor health in ways that you couldn't dream of just a few years ago. It is a factory of innovation," Cramer writes in his latest book Get Rich Carefully.

UBS analyst Michael Binetti raised estimates and his price target but reiterated the stock as "neutral." The investment firm expects 2014 EPS of $1.87 from $1.80, based on 25% revenue growth, a 49% gross margin, 25% increase in year-on-year selling, general and administrative expenses (SG&A), and a 27% year-over-year increase in EBIT to $338 million.

"UA's outsized stock reaction was equally due to a strong 4Q, but also to comments suggesting that a step-change in major addressable markets is coming sooner than we expected: 1) US apparel has a longer high-growth period than expected (boosted by extension into big channels like dept stores, and a push into under-penetrated categories like outerwear), 2) footwear inventory clearing will allow better sell-throughs (and comments that UA's dismal footwear margins should finally start to improve) in '14; 3) a long awaited rollout of the new international strategy starting in 1Q; 4) a significantly improved women's business (amplified by a Soho store in Spring '14); 5) high-profile new marketing initiatives (Notre Dame/Navy sponsorships, major marketing event at Grand Central Station)," wrote Binetti in the report.

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