Value
5.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 0.4 |
| Fwd P/E | 4.9 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 25.7x
- ▸PEG: 0.21
UAA · Why this verdict
Why Under Armour (UAA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Under Armour's class A voting shares show technical breakout signals and an extremely low PEG ratio of 0.21, but the business is burning cash at 11% of revenue, revenues are declining, and 30% short interest reflects substantial informed bearish conviction.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Short interest of 30% of the float is among the highest in the apparel sector, indicating that a significant proportion of informed investors are wagering that the stock will decline from current levels near $6.02. Key risks | Short interest falls below 20% within 12 months as bears cover on evidence that the turnaround is gaining traction. | →Stable |
| CounterElevated short interest can fuel a short squeeze if positive news surprises emerge, as covering demand can amplify upward price moves well beyond fundamental fair value. | ||
Free cash flow is negative at -11% of revenue, confirming the class A shares represent a stake in a business that is currently destroying capital rather than generating it, consistent with the quality score of 2.7 out of 10. Quality breakdown | Free cash flow turns positive and exceeds 3% of revenue within the next 12 months as operational restructuring delivers results. | →Stable |
| CounterA current ratio of 5.9 and adequate liquidity suggest the business can sustain negative free cash flow for multiple years without facing an imminent funding crisis. | ||
The class A shares have formed a golden cross with price above all moving averages and momentum scoring 6.3 out of 10, indicating that despite fundamental concerns, the technical structure is constructive in the near term. Momentum breakdown | Price sustains above the 200-day moving average for at least 6 months and on-balance volume continues to trend higher. | →Stable |
| CounterThe moving average slope is described as flat, and with the stock already 6.1% above its analyst price target, the technical breakout has no fundamental anchor to sustain it. | ||
Revenue declined 1% year over year and analyst earnings estimates fell 13.7% over the past 30 days, suggesting that the consensus view of future earnings power is eroding faster than any single quarter result can offset. Sentiment breakdown | Revenue returns to positive growth above 5% year over year and earnings estimate revisions turn positive within the next 2 quarters. | →Stable |
| CounterManagement has historically delivered earnings beats well above the consensus estimate bar when set conservatively, as the 2021 track record of +300% average surprise demonstrates. | ||
Short interest of 30% of the float is among the highest in the apparel sector, indicating that a significant proportion of informed investors are wagering that the stock will decline from current levels near $6.02.
→StableKey risks
- Expectation
- Short interest falls below 20% within 12 months as bears cover on evidence that the turnaround is gaining traction.
CounterElevated short interest can fuel a short squeeze if positive news surprises emerge, as covering demand can amplify upward price moves well beyond fundamental fair value.
Free cash flow is negative at -11% of revenue, confirming the class A shares represent a stake in a business that is currently destroying capital rather than generating it, consistent with the quality score of 2.7 out of 10.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and exceeds 3% of revenue within the next 12 months as operational restructuring delivers results.
CounterA current ratio of 5.9 and adequate liquidity suggest the business can sustain negative free cash flow for multiple years without facing an imminent funding crisis.
The class A shares have formed a golden cross with price above all moving averages and momentum scoring 6.3 out of 10, indicating that despite fundamental concerns, the technical structure is constructive in the near term.
→StableMomentum breakdown
- Expectation
- Price sustains above the 200-day moving average for at least 6 months and on-balance volume continues to trend higher.
CounterThe moving average slope is described as flat, and with the stock already 6.1% above its analyst price target, the technical breakout has no fundamental anchor to sustain it.
Revenue declined 1% year over year and analyst earnings estimates fell 13.7% over the past 30 days, suggesting that the consensus view of future earnings power is eroding faster than any single quarter result can offset.
→StableSentiment breakdown
- Expectation
- Revenue returns to positive growth above 5% year over year and earnings estimate revisions turn positive within the next 2 quarters.
CounterManagement has historically delivered earnings beats well above the consensus estimate bar when set conservatively, as the 2021 track record of +300% average surprise demonstrates.
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
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.5 |
| OBV | 5.9 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Above 200-day MA
Sentiment
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.1 |
| erm sentiment | 0.0 |
- ▸Estimates falling as sentiment proxy (-13.7%)
Insider
7.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 8.0 |
| insider conviction | 8.0 |
| holder change | 5.1 |
- ▸Notable insider buying — $5,869,079 (0.227% of mkt cap)
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 0.0 |
| growth rank | 0.8 |
Technical
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.1 |
| 52w position | 5.3 |
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.5 |
| days to cover | 5.6 |
| volatility | 1.3 |
| put call | 9.6 |
| implied vol | 1.7 |
| max pain risk | 7.0 |
| beta | 4.4 |
| debt equity | 4.3 |
- ▸High short interest justified: 30%
- ▸High IV: 70%
- ▸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)
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:5.5>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:43d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.7=NEGATIVE
- 8K_SERIOUS:2.05
Warning (1)
- MOMENTUM:5.5<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.67
Upside
-9.5%
Downside
14.2%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 66, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.69>1.3, MCap $2.6B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Insider at 7.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.7=NEGATIVE.
The strongest dimensions are Insider at 7.0, Catalyst at 6.5, and Growth at 6.2; the weakest are Technical at 1.9, Quality at 2.7, and Peer rank at 3.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.67 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Short interest of 30% of the float is among the highest in the apparel sector, indicating that a significant proportion of informed investors are wagering that the stock will decline from current levels near $6.02.
Trip ifShort interest rises above 35%, more than 5 percentage points above the current 30% level, indicating bears are increasing conviction rather than capitulating.
- P2Free cash flow is negative at -11% of revenue, confirming the class A shares represent a stake in a business that is currently destroying capital rather than generating it, consistent with the quality score of 2.7 out of 10.
Trip ifFree cash flow remains below -8% of revenue for 2 consecutive quarters, confirming that the restructuring is not improving cash generation.
- P3The class A shares have formed a golden cross with price above all moving averages and momentum scoring 6.3 out of 10, indicating that despite fundamental concerns, the technical structure is constructive in the near term.
Trip ifPrice falls below $5.60, the current stop-loss level of 7% below $6.02, breaking the technical breakout structure.
- P4Revenue declined 1% year over year and analyst earnings estimates fell 13.7% over the past 30 days, suggesting that the consensus view of future earnings power is eroding faster than any single quarter result can offset.
Trip ifAnalyst earnings estimate revisions fall by more than 15% over any 30-day period, accelerating beyond the current -13.7% rate of downward revision.