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Shareholders of Under Armour, Inc. (NYSE:UAA) will be pleased this week, given that the stock price is up 14% to US$9.68 following its latest second-quarter results. Revenues were US$1.4b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.39, an impressive 114% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Under Armour after the latest results.
View our latest analysis for Under Armour
Following the recent earnings report, the consensus from 21 analysts covering Under Armour is for revenues of US$5.11b in 2025. This implies a discernible 5.5% decline in revenue compared to the last 12 months. Losses are forecast to balloon 406% to US$0.21 per share. Before this latest report, the consensus had been expecting revenues of US$5.10b and US$0.30 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very promising decrease in losses per share in particular.
These new estimates led to the consensus price target rising 14% to US$9.77, with lower forecast losses suggesting things could be looking up for Under Armour. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Under Armour at US$16.00 per share, while the most bearish prices it at US$4.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 11% annualised decline to the end of 2025. That is a notable change from historical growth of 3.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Under Armour is expected to lag the wider industry.