NEW YORK (TheStreet) -- Shares of Under Armour (UA) - Get Under Armour, Inc. Class C Report were lower in mid-afternoon trading on Thursday as the company prepares to post 2016 third quarter earnings before Tuesday's opening bell.
Analysts surveyed by FactSet are looking for the Baltimore, MD-based athletic retailer to post earnings of 25 cents per share on revenue of $1.46 billion for the quarter.
In 2015, Under Armour reported earnings of 23 cents per share, adjusted for a recent stock split, on revenue of $1.20 billion for the same period. In April the company distributed class C stock to existing shareholders, having the same effect of a two-for-one stock split.
Raymond James noted today that the stock "has declined 26% after reaching a lifetime high of $53 (split-adjusted) on September 17, 2015, compared to an 8% increase in the S&P 500," but added that Under Armour's valuation is still "rich."
The firm is concerned with Under Armour's decelerating cash conversion cycle and U.S. wholesale growth, according to Barron's.
Additionally, Under Armour's earnings before income and tax percentage is facing pressure from infrastructure investments and rising sales in footwear and international segments, the firm said.
But Raymond James still has confidence in Under Armour's ability to boost revenues by about 24% annually through 2017.
The firm has a "hold" rating on Under Armour shares, according to FactSet.
Earlier this week the company agreed to be Major League Baseball's official on-field uniform provider starting in 2020, sources said, ESPN reported.
(Under Armour is held in the Growth Seeker portfolio. See all of the holdings with a free trial.)
Separately, 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 articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C+.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and premium valuation.
You can view the full analysis from the report here: UA