Under Armour (NYSE: UA) (NYSE: UAA) is tough to love. As an investment, the company is outclassed by a number of other athletic apparel stocks that don't come with the performance issues Under Armour has dealt with in the past several years. The stock may be down 50% year to date, but investors should think twice before picking up shares.
Five years ago, Under Armour was on its way to becoming the next Nike. Its reputation -- and premium valuation -- were somewhat justifiable when the company was consistently reporting 20% to 30% annual revenue growth. Unfortunately, that growth came to an end. Since 2017, it has slowed to a crawl, and disruptions from the pandemic led to a 32% year-over-year decline in revenue in the first half of 2020. Management is not providing specific guidance for full-year 2020 as of this writing, but on the latest earnings call, CFO David Bergman warned that "revenue could be down as much as 20% to 25% in the back half of the year."
Profitability has similarly been volatile, and with such high expectations for the brand just a few years ago, many investors were caught off guard as the stock began its extended slide.
Source Fool.com