Markets
UAA

Under Armour to report Q4 results February 13

What's Happening

Athletic footwear and apparel company Under Armour ( UAA ) is scheduled to release its fourth-quarter results before the market open February 13. Analysts expect a profit of $0.01, down from a profit of $0.23 during the same period last year.

Technical Analysis

UAA was recently trading at $13.60, down $9.86 from its 12-month high and $2.20 above its 12-month low. Overall technical indicators for UAA are bearish with strong downward trend. The stock has recent support above $12.50 and recent resistance below $15.00. Of the 29 analysts who cover the stock, four rate it a "strong buy", 13 rate it a "hold", one rates it a "sell", and 11 rate it a "strong sell". UAA gets a score of 19 from InvestorsObserver's Stock Score Report.

Analyst's Thoughts

With earnings falling sharply, it comes as no surprise that analysts have an overwhelmingly negative view of the stock at this time. With 11 out of 29 analysts that cover the stock giving it a "strong sell" rating, there is a significant amount of bearish sentiment toward the company. The good news for investors is that with shares so depressed, and so much negativity already priced into the stock, any sign of good news could lead to a sharp increase in share price. Last quarter, the company was able to top estimates on the bottom line, but sales came in weaker than expected, and the mixed results drove the stock sharply lower. Shares rebounded a little during the final month of the year, but the recent market selloff hit the stock, which is currently trading in the lower end of its 52-week range. The company is going to need to show earnings and revenues that are at least in-line with the consensus, or the stock is going to fall to a fresh 52-week low. Even with the recent pullback in the stock, its valuation is high, with a P/E of 41.7, and analysts see earnings falling by 2.6% per annum over the next five years. With so much negative sentiment in the stock right now, I would avoid any long positions ahead of earnings that were not hedged with a decent amount of downside protection just in case the results fail to impress Wall Street. If you continue to hold the stock, you may get a post-earnings bounce, which may be a good time to unload the stock. Definitely have an exit strategy in mind in case the results disappoint and shares move lower.

Stock Only Trade

Bullish Trade

If you want a bullish hedged trade on the stock, consider an April 5/10 bull-put credit spread for a 20-cent credit. That's a potential 4.2% return (21.7% annualized*) and the stock would have to fall 25.0% to cause a problem.

Bearish Trade

If you want to take a bearish stance on the stock at this time, consider an April 17.50/22.50 bear-call credit spread for a $0.20 credit. That's a potential 4.2% return (21.7% annualized*) and the stock would have to rise 30.1% to cause a problem.

Covered Call Trade

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Originally published on InvestorsObserver.com


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

UAA

Other Topics

Options