Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Under Armour
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
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Highlights from the ratings report include:
- UA's revenue growth has slightly outpaced the industry average of 17.3%. Since the same quarter one year prior, revenues rose by 26.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- UA's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry average. The net income increased by 6.8% when compared to the same quarter one year prior, going from $6.24 million to $6.67 million.
- Net operating cash flow has significantly increased by 2433.60% to $46.21 million when compared to the same quarter last year. In addition, UNDER ARMOUR INC has also vastly surpassed the industry average cash flow growth rate of 29.82%.
- UNDER ARMOUR INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNDER ARMOUR INC increased its bottom line by earning $0.93 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($1.19 versus $0.93).
Under Armour, Inc. engages in the design, development, marketing, and distribution of apparel, footwear, and accessories for men, women, and youth worldwide. The company has a P/E ratio of 59.4, above the average consumer non-durables industry P/E ratio of 58.8 and above the S&P 500 P/E ratio of 17.7. Under Armour has a market cap of $6 billion and is part of the
industry. Shares are up 54.8% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.