That environment “has supported accelerated two-year growth, margin upside, and favorable second-half orders/backlog for many brands.”
Further, “The company has demonstrated improving operating performance following multi-year restructuring/turnaround efforts, setting the stage in our view for upside versus Q2 2021 estimates and improved near-term sentiment,” Komp said.
“While we still have some longer-term questions, near-term downside may be limited to the high-teens (1.4 times next 12 months enterprise value/sales) and upside toward $30-plus seems reasonable in an upside case.”
Komp rated Under Armour at neutral with at $25 price target.
UAA traded Monday at $21.15, up 3.4% at last check, and has climbed 18% in the past six months.
The company “has largely completed multi-year restructuring/turnaround efforts focused on re-basing the cost structure, cutting costs, and improving quality of sales while re-investing behind brand, product, and direct-to-consumer e-commerce,” Komp said.
Under Armour shares jumped in May, after it reported earnings that exceeded expectations and offered increased guidance. That triggered numerous positive notes from analysts.
Analysts at Atlantic Equities upgraded the stock to neutral from sell, as they are more bullish on the company's turnaround progress. The firm has a $24 price target.
"The last two quarters have shown solid and convincing progress on the operational turnaround of Under Armour,” the analysts said.