Morningstar Rating

Stock Research and Analysis

by Paul Swinand

Bulls Say

Although there are few customer switching costs in athletic apparel and footwear, Under Armour's focus on younger athletes should instill brand loyalty at an earlier age and prompt repeat purchases.
As the Under Armour brand grows internationally across sports and product categories, it will become harder to encroach on its brand positioning and reputation for innovation.
Under Armour gains credibility through creative marketing, sponsorships in pro and Olympic sports, and a number of collegiate athletic departments, including the University of Notre Dame. Read more 

Bears Say

The U.S. athletic apparel and footwear market is fiercely competitive and largely mature.
Under Armour does not own any proprietary fabric technologies or process patents. Larger rivals can compete with equally innovative products while lower-priced imitation products could take market share from the core apparel line. Volatile raw material and overseas manufacturing costs could have an adverse impact on operating margins.
Despite strides internationally and outside of high school team sports, Under Armour is still dependent on its home market and its core apparel offerings. Read more 

Management

President, chairman, and CEO Kevin Plank has been at the helm since founding the company in 1996. We believe corporate governance would be improved by splitting the roles of CEO and chairman, though we have not witnessed any examples of mismanagement.  Read more 

Profile

Under Armour markets athletic apparel, footwear, and gear for men, women, and children. The firm has made its name by developing technologically advanced performance apparel   Read more 

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