Here's Why Under Armour (UA) Stock Is Climbing Today
NEW YORK (TheStreet) -- Under Armour (UA) - Get Report stock is rising by 2.39% to $38.14 in late-morning trading on Tuesday, after the company signed a 15-year, $280-million contract with UCLA, the Los Angeles Times reports.
UCLA will receive $15 million in cash up front and another $11 million each year in rights and marketing fees, the L.A.Times adds. Under Amour will supply about $7.4 million in clothing, shoes and equipment each school year and an additional $2 million throughout the next eight years for facilities upgrades.
The deal is expected to be announced at noon today.
Michigan, Texas and Ohio State have signed deals with Nike (NKE) in recent months, but Under Armour's UCLA deal is believed to be the largest shoe and apparel deal in NCAA history.
The sportswear company approached UCLA with the hope of adding a West Coast program to a group including Notre Dame, Auburn and Wisconsin.
UCLA has a 10-year contract with Adidas that's set to expire next year.
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Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B-.
Under Armour's strengths such as its robust revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: UA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
