Stock Analysis & Valuation Under Armour, Inc. (U9RA.DE)

• Previous Close: €6.42
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	113.60	1669
Intrinsic value (DCF)	2.84	-56
Graham-Dodd Method	5.60	-13
Graham Formula	2.20	-66

Strategic Investment Analysis

Company Overview

Under Armour, Inc. (U9RA.DE) is a leading global performance apparel, footwear, and accessories brand headquartered in Baltimore, Maryland. Specializing in innovative athletic wear, Under Armour offers a diverse product portfolio under brands like UNDER ARMOUR, UA, HEATGEAR, COLDGEAR, and HOVR, catering to men, women, and youth. The company operates across multiple segments, including compression, fitted, and loose-fit apparel, as well as footwear for running, training, basketball, and outdoor activities. Under Armour also provides digital fitness services through platforms like MapMyRun and MapMyRide. With a strong omnichannel presence, the company sells through wholesale partners, 422 mono-branded retail stores, and e-commerce platforms. Under Armour serves markets in North America, Europe, the Middle East, Africa, Asia-Pacific, and Latin America, positioning itself as a key player in the competitive athletic apparel sector. Its focus on performance-driven innovation and brand loyalty makes it a significant contender in the consumer cyclical industry.

Investment Summary

Under Armour presents a mixed investment profile. The company's strong brand recognition and innovative product lines in performance apparel and footwear offer growth potential, particularly in international markets. However, its high beta (1.47) indicates significant volatility relative to the market, which may deter risk-averse investors. The company's revenue of €5.7 billion and net income of €232 million in FY 2024 reflect steady performance, but its lack of dividend payouts and substantial total debt (€1.44 billion) could be concerns. Under Armour's operating cash flow (€354 million) and capital expenditures (€-150 million) suggest disciplined financial management, but competition from larger rivals like Nike and Adidas remains a challenge. Investors should weigh Under Armour's growth prospects against sector headwinds and competitive pressures.

Competitive Analysis

Under Armour operates in the highly competitive athletic apparel and footwear industry, dominated by global giants like Nike and Adidas. The company's competitive advantage lies in its strong brand identity, particularly in performance-oriented apparel, and its focus on innovation (e.g., HEATGEAR and COLDGEAR technologies). However, Under Armour's market share is significantly smaller than its top competitors, limiting its pricing power and economies of scale. The company has made strides in direct-to-consumer sales (422 stores and e-commerce), but Nike and Adidas have more extensive retail networks and stronger digital platforms. Under Armour's niche in compression wear and training gear differentiates it, but it lacks the broad lifestyle appeal of its rivals. Financial metrics show Under Armour is profitable but carries higher debt relative to peers. Its growth in international markets (Europe, Asia-Pacific) is promising but faces stiff competition from local and global brands. The company must continue investing in R&D and marketing to maintain its position as a performance-focused alternative to industry leaders.

Major Competitors

• Nike, Inc. (NKE): Nike is the global leader in athletic footwear and apparel, with unmatched brand recognition and market share. Its strengths include a vast product portfolio, strong wholesale and DTC channels, and iconic marketing campaigns. However, Nike faces criticism for over-reliance on North America and supply chain vulnerabilities. Compared to Under Armour, Nike has superior scale and innovation capabilities but less focus on performance-specific gear.
• Adidas AG (ADS.DE): Adidas is Under Armour's closest European competitor, with a strong presence in football (soccer) and lifestyle segments. Its strengths include a robust international footprint and collaborations with celebrities (e.g., Kanye West's Yeezy line). Weaknesses include recent supply chain disruptions in China. Adidas outperforms Under Armour in global brand appeal but lags in specialized performance apparel.
• Lululemon Athletica Inc. (LULU): Lululemon dominates the premium athleisure market, particularly in yoga and women's apparel. Its strengths include high brand loyalty and superior margins. However, its product range is narrower than Under Armour's. Lululemon's focus on lifestyle and wellness contrasts with Under Armour's athletic performance positioning, making it less of a direct competitor but a threat in overlapping categories.
• Puma SE (PUMA.DE): Puma competes with Under Armour in performance footwear and training apparel. Its strengths include strong partnerships (e.g., with FIFA) and faster growth in emerging markets. Weaknesses include lower brand prestige than Nike or Adidas. Puma's European base gives it an edge over Under Armour in the region, but it lacks Under Armour's technological focus in performance gear.
• Skechers USA, Inc. (SKX): Skechers is a key competitor in affordable athletic and casual footwear. Its strengths include a value-oriented pricing strategy and strong wholesale relationships. However, it lacks Under Armour's performance credibility. Skechers targets a different demographic (budget-conscious consumers), but its growth in international markets poses indirect competition to Under Armour.