Under Armour Earnings: Comeback Underway but Winning Will Take Time; Shares Undervalued

No-moat Under Armour outperformed our expectations by posting a small (non-GAAP) profit in fiscal 2025’s first quarter, sending its shares up 19% on Aug. 8. While the firm has a long way to go on its turnaround plan and guidance for the rest of the fiscal year is underwhelming, we anticipate improving sales growth in fiscal 2026 and thereafter as its product elevation, pricing, supply chain, and marketing plans take effect. Since returning as CEO, Kevin Plank has brought in new leaders to implement his vision for a company that operates more efficiently and is less dependent on discounting. We rate shares as undervalued in relation to our $14 per share fair value estimate, which we do not expect to change materially.