Stock Analysis & Valuation Under Armour, Inc. (U9R.DE)

• Previous Close: €6.98
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	6.70	-4
Graham Formula	8.90	28

Strategic Investment Analysis

Company Overview

Under Armour, Inc. (U9R.DE) is a leading global performance apparel, footwear, and accessories brand headquartered in Baltimore, Maryland. Specializing in innovative sportswear, Under Armour offers a diverse product portfolio under brands like UNDER ARMOUR, UA, HEATGEAR, COLDGEAR, and HOVR, catering to athletes and fitness enthusiasts. The company operates through wholesale and direct-to-consumer channels, including 422 brand and factory stores, e-commerce platforms, and digital services like MapMyRun and MapMyRide. With a strong presence in North America, Europe, the Middle East, Africa, and Asia-Pacific, Under Armour is a key player in the competitive athletic apparel sector. The company’s focus on performance-driven innovation and digital fitness integration positions it as a dynamic contender in the consumer cyclical industry.

Investment Summary

Under Armour presents a mixed investment profile. The company reported €5.9 billion in revenue and €386.8 million in net income for FY 2023, with diluted EPS of €0.87. However, negative operating cash flow (-€9.9 million) and high total debt (€1.52 billion) raise concerns about liquidity and leverage. The stock’s beta of 1.655 indicates higher volatility compared to the market. While Under Armour’s strong brand recognition and direct-to-consumer growth are positives, intense competition from Nike and Adidas, along with macroeconomic pressures, could limit upside potential. The lack of dividends may deter income-focused investors. Long-term prospects hinge on innovation, digital engagement, and international expansion.

Competitive Analysis

Under Armour competes in the highly saturated athletic apparel market, where differentiation through innovation and brand loyalty is critical. The company’s competitive advantage lies in its performance-focused product lines, such as HEATGEAR and COLDGEAR, which cater to specific athletic needs. Its digital ecosystem, including MapMyRun, enhances customer engagement and retention. However, Under Armour lags behind industry giants Nike and Adidas in global market share, brand prestige, and marketing spend. While Under Armour has made strides in direct-to-consumer sales, its reliance on wholesale channels exposes it to retailer margin pressures. The company’s smaller scale also limits its ability to match rivals’ R&D budgets and sponsorship deals. To strengthen its position, Under Armour must continue investing in high-performance materials, expand its international footprint, and leverage digital platforms to build a loyal customer base.

Major Competitors

• Nike, Inc. (NKE): Nike dominates the global athletic apparel and footwear market with unmatched brand recognition, extensive sponsorship deals, and a robust direct-to-consumer strategy. Its innovation pipeline (e.g., Air technology, Flyknit) and marketing prowess give it a significant edge. However, Nike’s premium pricing and reliance on China for manufacturing pose risks. Under Armour struggles to match Nike’s scale and influence but competes on niche performance categories.
• Adidas AG (ADS.DE): Adidas is a global leader in sportswear, known for its lifestyle and performance segments (e.g., Ultraboost, Stan Smith). The company benefits from strong European and emerging market presence but has faced challenges in North America. Adidas’ collaborations (e.g., Kanye West’s Yeezy line) and sustainability initiatives differentiate it. Under Armour’s focus on performance gear contrasts with Adidas’ broader lifestyle appeal.
• Lululemon Athletica Inc. (LULU): Lululemon excels in premium athleisure, with a loyal customer base and strong direct-to-consumer sales. Its yoga and lifestyle focus differentiates it from Under Armour’s performance-oriented approach. Lululemon’s higher margins and brand cachet are strengths, but its narrower product range limits its athletic market penetration compared to Under Armour’s diversified offerings.
• Puma SE (PUM.DE): Puma competes with Under Armour in performance and lifestyle segments, leveraging endorsements from athletes like Usain Bolt. Its agility in trend-driven designs and lower price points attract younger consumers. However, Puma’s smaller scale in North America and weaker digital ecosystem compared to Under Armour’s MapMyRun platform are relative disadvantages.