Value
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 0.6 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
- ▸Forward P/E: 15.5x
- ▸PEG: 0.12
- ▸Attractively valued
UA · Why this verdict
Why Under Armour (UA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Under Armour's class C shares show technical breakout momentum above all moving averages with a perfect historical earnings beat record, but quality scores of 2.7 out of 10, negative free cash flow, and declining revenue create a fundamental picture inconsistent with sustainable recovery.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
North America accounts for 58% of revenue and apparel represents 68% of sales, creating a dual concentration risk that makes the company vulnerable to weakness in either the domestic consumer or the core apparel category. Bear case | International revenue grows to above 50% of total or apparel share falls below 60% within 3 years, reducing the dual concentration exposure. | →Stable |
| CounterNorth American market leadership in performance apparel provides significant pricing power and brand loyalty among core athletic customers, which is difficult for new entrants to displace. | ||
Under Armour burned cash equal to 11% of revenue in the most recent period, with free cash flow negative, indicating the business is not self-funding and may require external financing to sustain operations or fund brand investment. Quality breakdown | Free cash flow turns positive and cash burn falls below 5% of revenue within the next 12 months as cost restructuring delivers savings. | →Stable |
| CounterA forward price-to-earnings ratio of 15.4x and PEG of 0.12 suggest the market is pricing in significant earnings improvement, which could coincide with a return to positive cash flow faster than the current trajectory implies. | ||
The stock has formed a golden cross pattern with price above all moving averages and a rising on-balance volume trend, with momentum scoring 7.0 out of 10 and RSI at a healthy 59. Momentum breakdown | Price remains above the 200-day moving average and sustains the current technical breakout structure for at least 6 months. | →Stable |
| CounterThe moving average slope is flat rather than rising, and with only $0.41 in upside to the $5.91 resistance target from the current $5.85 price, there is almost no technical room before the stock faces overhead supply. | ||
Revenue declined 1% year over year, and analyst estimates have been revised down 13.7% over the past 30 days, indicating that forward expectations are deteriorating faster than the headline earnings beats suggest. Sentiment breakdown | Revenue growth returns to positive territory above 3% year over year within the next 12 months. | →Stable |
| CounterThe prior earnings history from 2021 showed four consecutive beats with an average positive surprise of 290%, suggesting management has demonstrated the ability to reset and execute above lowered bars. | ||
North America accounts for 58% of revenue and apparel represents 68% of sales, creating a dual concentration risk that makes the company vulnerable to weakness in either the domestic consumer or the core apparel category.
→StableBear case
- Expectation
- International revenue grows to above 50% of total or apparel share falls below 60% within 3 years, reducing the dual concentration exposure.
CounterNorth American market leadership in performance apparel provides significant pricing power and brand loyalty among core athletic customers, which is difficult for new entrants to displace.
Under Armour burned cash equal to 11% of revenue in the most recent period, with free cash flow negative, indicating the business is not self-funding and may require external financing to sustain operations or fund brand investment.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and cash burn falls below 5% of revenue within the next 12 months as cost restructuring delivers savings.
CounterA forward price-to-earnings ratio of 15.4x and PEG of 0.12 suggest the market is pricing in significant earnings improvement, which could coincide with a return to positive cash flow faster than the current trajectory implies.
The stock has formed a golden cross pattern with price above all moving averages and a rising on-balance volume trend, with momentum scoring 7.0 out of 10 and RSI at a healthy 59.
→StableMomentum breakdown
- Expectation
- Price remains above the 200-day moving average and sustains the current technical breakout structure for at least 6 months.
CounterThe moving average slope is flat rather than rising, and with only $0.41 in upside to the $5.91 resistance target from the current $5.85 price, there is almost no technical room before the stock faces overhead supply.
Revenue declined 1% year over year, and analyst estimates have been revised down 13.7% over the past 30 days, indicating that forward expectations are deteriorating faster than the headline earnings beats suggest.
→StableSentiment breakdown
- Expectation
- Revenue growth returns to positive territory above 3% year over year within the next 12 months.
CounterThe prior earnings history from 2021 showed four consecutive beats with an average positive surprise of 290%, suggesting management has demonstrated the ability to reset and execute above lowered bars.
Per-dimension breakdown
Quality
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.0 |
| Gross margin | 5.1 |
| Op margin | 3.5 |
| Net margin | 0.0 |
| Current ratio | 5.9 |
| FCF quality | 0.0 |
| Moat | 3.2 |
| Piotroski F | 5.6 |
- ▸Cash-burning: FCF -11% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.3 |
| EPS growth | 10.0 |
- ▸Declining revenue: -1%
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.2 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
3.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 0.0 |
- ▸Estimates falling as sentiment proxy (-13.7%)
Insider
5.0/10data confidence 50%Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.7 |
| quality rank | 0.0 |
| growth rank | 0.8 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.3 |
| support resistance | 2.4 |
| 52w position | 4.8 |
Risk (lower is worse)
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 2.8 |
| volatility | 1.5 |
| put call | 10.0 |
| implied vol | 0.9 |
| max pain risk | 3.0 |
| beta | 4.4 |
| debt equity | 4.3 |
- ▸High IV: 75%
- ▸Above max pain $2
- ▸Concentration risks: 3 HIGH, 3 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Estimates down -13.7% (30d)
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:43d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.4<4.5
- 8K_SERIOUS:2.05
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
11.5%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 62, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.69>1.3, MCap $2.5B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.5 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:4.4<4.5.
The strongest dimensions are Value at 7.5, Catalyst at 6.5, and Growth at 6.2; the weakest are Quality at 2.7, Sentiment at 3.0, and Technical at 3.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Under Armour burned cash equal to 11% of revenue in the most recent period, with free cash flow negative, indicating the business is not self-funding and may require external financing to sustain operations or fund brand investment.
Trip ifFree cash flow remains negative at more than -5% of revenue for 2 consecutive quarters, confirming the cash burn is not improving.
- P2North America accounts for 58% of revenue and apparel represents 68% of sales, creating a dual concentration risk that makes the company vulnerable to weakness in either the domestic consumer or the core apparel category.
Trip ifNorth American revenue share rises above 65% while international revenue declines by more than 5% year over year, worsening the concentration risk.
- P3The stock has formed a golden cross pattern with price above all moving averages and a rising on-balance volume trend, with momentum scoring 7.0 out of 10 and RSI at a healthy 59.
Trip ifPrice falls below $5.44, the current stop-loss level, breaking the technical breakout structure established above all moving averages.
- P4Revenue declined 1% year over year, and analyst estimates have been revised down 13.7% over the past 30 days, indicating that forward expectations are deteriorating faster than the headline earnings beats suggest.
Trip ifRevenue growth remains below 0% for more than 2 consecutive quarters, confirming that the declining revenue trend is not reversing.