UNDER ARMOUR, INC. (UAA): what the price assumes

In the published model solve dated 2026-Q2, anchored at $6.75, UNDER ARMOUR, INC. (UAA) is priced for +17.0% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/UAA

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7pp.

How unusual the bet is: within-range

Valuation X-Ray

The price is justified by relative-multiple; asset-based/growth-DCF land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative Families that call it expensive: Asset, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.1%); the inversion above states its own rate.

Per-Model Detail (n=5)

Solvency

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 4.5%); the trailing year was depressed.

Bullet Takeaways

• Under Armour is a turnaround in progress: an athletic brand priced near $6 a share while management resets the operating model, with the company reporting it has moved wholesale partners from high return rates and order cancellations toward steadier reorders.
• The balance sheet carries the bet: net debt of about $881 million against negative trailing operating income, with interest coverage near four times, so the brand has time to recover but not an unlimited amount of it.
• The next milestones to watch are the fiscal 2027 targets management set for returning North America and APAC to stability and potential growth, the proof points that decide whether the reset is working.

Bull Case

The balance sheet is where the turnaround case has to start, because it is what buys the brand the time to fix itself. Under Armour carries gross debt of about $1.19 billion against roughly $309 million in liquid assets, leaving net debt near $881 million, and trailing operating income is still negative as restructuring works through the numbers. The company has booked $261 million in total restructuring and transformation costs to date, $109 million in cash and $152 million in non-cash charges. Interest coverage near four times says the debt is serviceable through the reset, and the share count has actually been shrinking, down about 3% a year, rather than the dilution a distressed retailer usually resorts to. Management is funding the fix from the business, not the equity market.

The brand itself is the asset the balance sheet is protecting. Under Armour's 10-K describes products "worn by athletes at all levels, from youth to professional, on playing fields around the globe and by consumers with active lifestyles", and frames the strategy plainly as "driving premium brand-right growth and delivering improved profitability". That is the whole thesis in the company's own words: stop chasing volume at discount, rebuild margin on a premium positioning. The same filing names why it believes it competes, citing "our brand image and recognition, the performance and quality of our products and our selective distribution", the last phrase signaling the deliberate pullback from over-distribution that diluted the brand.

The operational evidence is starting to line up behind the words. CEO Kevin Plank described fiscal 2026 as reflecting "intentional steps we're taking to reset the business and restore the discipline required to operate as a best-in-class brand", and the company pointed to wholesale relationships stabilizing, with partners shifting from cancellations toward reorder consistency. Adjusted diluted EPS of $0.12 for the year is thin, but for a brand the relative-multiple lens already prices at a quarter of where a healthy apparel peer would trade, the bet is that stabilization is the floor and fiscal 2027 is where growth resumes.

Bear Case

The variable with the most leverage on this turnaround sits outside management's control: the cost of importing what Under Armour sells. An apparel and footwear company that sources globally lives and dies on landed cost, and the price near $6 does not obviously reflect how a tariff or trade-policy shift would land on a brand already fighting to rebuild gross margin. The 10-K is direct that economic disruption in key markets "may materially harm our sales, profitability and financial condition and our prospects for growth", and that the industry faces "significant pricing pressure" from many directions. For a company whose entire reset depends on charging more, not less, an external cost shock that forces discounting would strike at the exact lever the turnaround needs.

The margin math is already strained before any external shock. Gross profit fell $155.5 million to $2.5 billion in fiscal 2025, per the filing, even as the company spent to ship and operate its distribution network. The reset is real, but it is being paid for in the present: trailing operating income is negative, and the $261 million of restructuring charges is cash and book value leaving the company while revenue stabilizes rather than grows. A turnaround that is still consuming charges, two years in, is one where the timeline to durable profit keeps extending, and the price assumes that timeline holds.

Competition is the slow pressure underneath all of it. Under Armour's own filing concedes that when retailers "earn higher margins from our competitors' products or their own private label offerings, they may favor the display and sale of those products", an honest admission that shelf space is not guaranteed. Against far larger athletic brands with deeper marketing budgets and the rise of private label, Under Armour is fighting for relevance from a weakened position. The price implies the brand reaches roughly mid-single-digit operating margins and grows the top line low double digits; both require winning back a consumer and a wholesale channel that have plenty of alternatives, and the bear case is simply that the reset stabilizes the brand without restoring the growth the price still pays for.

Valuation

The price tells a turnaround story, and the methods we use to triangulate split on whether to believe it. The relative-multiple lens, valuing Under Armour against apparel peers, lands well above the price, treating the stock as cheap at roughly a quarter of where a healthy comparable would trade. The methods grounded in current economics disagree. With trailing operating income negative, the earnings-power and growth-cash-flow approaches either cannot anchor on a real base or land below the price, and the book-value-plus-profitability methods sit modestly under it. The pattern is the classic deep-value-or-trap setup: the sector multiple says bargain, the company's own profitability says the business has to earn that multiple back first.

What the price actually requires is mid-single-digit operating margins and low-double-digit growth, against a company running a small negative margin today. That is a recovery, not a fantasy, which is why the priced-in assumption reads as within range rather than stretched. The bet is one of execution and timeline: the margins are reachable for this brand at its prior scale, but they have to be reached while restructuring charges still run and while wholesale and consumer demand stabilize. The relative-multiple support is real only if the recovery arrives.

Solvency is the binding constraint here, and it deserves the close. Net debt of about $881 million against negative operating income would be alarming except that interest coverage sits near four times and liquid assets of roughly $309 million plus a shrinking share count give the company room. The balance sheet can carry a turnaround; what it cannot carry is an indefinite one. The price is underwriting a brand reset that converts to profit on a fiscal 2027 timeline, and the debt load is the clock running against it.

Catalysts

The fiscal 2026 year, reported May 12, 2026 for the period ended March 31, framed the reset as on track if unspectacular. Adjusted diluted EPS came in at $0.12, and management emphasized operational milestones over headline growth. CEO Kevin Plank described the year as reflecting intentional steps to reset the business, pointing to a streamlined operating model and increased accountability driving what he called a more controlled and predictable business.

The most concrete progress was in the wholesale channel. The company confirmed a shift away from high return rates and order cancellations toward greater reorder consistency, and underscored confidence in returning both North America and APAC to stability and potential growth by fiscal 2027, based on channel, product, and operating milestones. The $261 million of cumulative restructuring and transformation costs marks how much has been spent to get there.

The catalysts ahead are the fiscal 2027 proof points: whether North America stops shrinking and whether the premium repositioning shows up as gross-margin recovery rather than promotional give-back. Those two readings, more than any single quarter's EPS, are what decide whether the brand reset converts into the growth the price is already paying for.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• LULU (lululemon athletica inc.)
• FY2025 10-K: …our technical product innovation. We also believe our ability to introduce new product innovations, combine function and fashion, and connect through in-store, online, and community experiences sets us apart from our competition. In addition, we believe our vertical retail distribution strategy and community-based…
• FY2025 10-K: …athletic apparel, including large, diversified apparel companies with substantial market share, and established companies expanding their production and marketing of technical athletic apparel, as well as against smaller retailers and those specifically focused on women's athletic apparel. We also face competition…
• AS (Amer Sports, Inc.)
• FY2025 20-F: …December 31, 2025, compared to the year ended December 31, 2024. Segment Adjusted Operating Profit in our Technical Apparel segment increased by 34.0% for the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was primarily driven by higher gross profit, partially offset by an…
• FY2025 20-F: …them exactly where they shop, across digital and physical spaces. We generate revenue from the sale of our products through direct-to-consumer and wholesale channels: • Direct-to-Consumer includes sales of our brands' products through (i) owned e-commerce websites and (ii) owned retail stores, which include elevated…
• COLM (COLUMBIA SPORTSWEAR COMPANY)
• FY2025 10-K: …("EMEA"), and Canada. The following tables disaggregate the Company's reportable segment Net sales by product category and channel, which the Company believes provides a meaningful depiction of how the nature, timing and uncertainty of Net sales are affected by economic factors: Year Ended December 31, 2025 (in…
• FY2025 10-K: , especially during periods of heightened economic uncertainty in our key markets. • Highly Competitive Markets. In each of our geographic markets, we face significant competition from global and regional branded apparel, footwear, accessories, and equipment companies. More recently this competition has extended to…
• CRI (Carter's, Inc.)
• FY2025 10-K: …comfort and fit, quality, pricing, style, selection, convenience, and breadth of distribution. Both national brand and private label manufacturers, as well as specialty apparel brands and retailers, aggressively compete in the baby and young children's apparel market. Our primary competitors include (in alphabetical…
• FY2025 10-K: …recruiting costs, and other related costs. Amounts are reflected within Selling, general, and administrative expenses in our consolidated statement of operations. (4) Related to a non-cash impairment charge on the OshKosh indefinite-lived tradename asset in fiscal 2024. U.S. Retail U.S. Retail segment net sales…
• GIII (G III APPAREL GROUP LTD /DE/)
• FY2025 10-K: …nature of our industry may result in lower prices for our products and decreased gross profit margins. ​ The apparel business is highly competitive. We have numerous competitors with respect to the sale of apparel, footwear and accessories, including digital websites, distributors that import products from abroad and…
• FY2025 10-K: …of the wholesale operations segment. ​ The Company allocates overhead to its business segments on various bases, which include units shipped, space utilization, inventory levels, and relative sales levels, among other factors. The method of allocation has been applied consistently on a year-to-year basis. ​ The total…
• LEVI (LEVI STRAUSS & CO)
• FY2025 10-K: …supply chain. Logistics . During fiscal year 2024 and as part of Project Fuel, the Company changed its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers used to warehouse and ship products to our wholesale customers, retail stores and e-commerce…
• FY2025 10-K: …or non-compliance can raise reputational challenges with our consumers and other stakeholders for various reasons, including the inability to sufficiently verify the origins for the material used in the products we sell. The global apparel industry is subject to intense competition and cost and pricing pressure. The…
• ANF (Abercrombie & Fitch Co.)
• FY2025 10-K: …its competition through product, providing high quality and newness; brand voice, amplifying and consolidating brand messaging; and experience, investing in immersive, participatory omnichannel shopping environments. Operating in a highly competitive industry environment can cause the Company to engage in greater…
• FY2025 10-K: …in competition from established companies. These increases in competition could reduce our ability to retain and grow sales, resulting in an adverse impact to our operating results and business. We face a variety of challenges in the highly competitive and constantly evolving retail industry, including: •…
• AEO (American Eagle Outfitters, Inc.)
• FY2025 10-K: …of climate change, the availability of import quotas, transportation disruptions and foreign currency exchange rate fluctuations, could adversely affect our business and cause our results of operations to fluctuate. We operate in a highly competitive industry, and we face significant pricing pressures from existing…
• FY2025 10-K: …a sufficient number of qualified senior managers and other key personnel. We must also attract, develop, and retain a sufficient number of qualified field and distribution center personnel. Competition for talent is intense and the turnover rate in the retail industry is generally high, and we cannot be sure that we…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.