Under Armour Surprises with Better-Than-Expected Earnings
Under Armour (UAA) announced quarterly earnings of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.19 per share. This marks an increase from earnings of $0.24 per share from the same quarter last year. These earnings numbers have been adjusted for non-recurring items.
The company delivered an earnings surprise of 57.89%. A quarter earlier, analysts anticipated a loss of $0.08 per share, but Under Armour surprised the market with earnings of $0.01 per share, a remarkable 112.50% surprise.
Over the past year, Under Armour has outperformed consensus EPS estimates four times.
Revenue Surpasses Expectations Amid Decline
In the quarter ending September 2024, Under Armour recorded revenues of $1.4 billion, which was 1.17% above the Zacks Consensus Estimate. However, this figure is down from revenues of $1.57 billion from the previous year. Additionally, the company topped consensus revenue estimates in three out of the last four quarters.
Management’s insights during the earnings call will play a crucial role in determining the stock’s immediate price movements and future earnings expectations.
Year-to-date, Under Armour shares have dipped by approximately 0.5%, contrasting sharply with the S&P 500’s gain of 24.3%.
Future Earnings Outlook Raises Questions
Despite its current performance, investors are curious about what lies ahead for Under Armour. Predicting the stock’s future can be challenging, but one useful metric is the company’s earnings outlook. This includes current earnings predictions for upcoming quarters and any recent changes to those predictions.
Research indicates a strong link between stock movements and changes in earnings estimate revisions. Investors can track these revisions independently or utilize the Zacks Rank, known for its effective earnings estimate revision strategy.
Before the latest earnings release, the estimate revisions for Under Armour presented a mixed outlook. The stock currently holds a Zacks Rank #3 (Hold), indicating an expected performance in line with the broader market in the near term. Current projections involve a consensus EPS estimate of $0.03 and revenues of $1.33 billion for the upcoming quarter, alongside $0.22 and $5.1 billion for the current fiscal year.
Industry Environment and Its Effect on Performance
It’s essential to keep in mind that the overall industry outlook can significantly influence stock performance. Under Armour is part of the Zacks Textile – Apparel sector, which is currently ranked in the bottom 41% of over 250 Zacks industries. Historical data shows that companies in the top half of Zacks-ranked industries tend to outperform the lower half by more than 2 to 1.
Another company in the same sector, G-III Apparel Group (GIII), has not yet reported its results for the quarter ending October 2024. Analysts predict G-III will post earnings of $2.26 per share, representing a decline of 18.7% year-over-year. Revenue estimates for G-III stand at $1.1 billion, a 3.1% increase from the previous year’s quarter.
Investment Opportunities from Zacks Experts
Amid thousands of stocks, five Zacks experts have highlighted their top picks, with one chosen by Director of Research Sheraz Mian as having the potential to double in value. This selected company caters to millennial and Gen Z markets, having generated nearly $1 billion in revenue last quarter. It appears to be an opportune moment for investors to consider this stock, especially following a recent pullback. While not all picks succeed, this one is positioned for significant growth, similar to past successes like Nano-X Imaging, which surged by 129.6% in just over nine months.
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Under Armour, Inc. (UAA): Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
