Under Armour Stock Tanks Following Gloomy Forecast

UAA was already down more than 30% coming into today

Deputy Editor
May 6, 2022 at 9:43 AM
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The shares of Under Armour Inc (NYSE:UAA) are plummeting, last seen down 16.2% at $11.98 ahead of the open, following the company's fiscal fourth-quarter financial results. The athletic apparel company reported losses of 1 cent per share on revenue of $1.30 billion, both of which missed analysts' expectations. In addition, Under Armour issued a weaker-than-expected full-year profit forecast, noting the impact of higher costs and supply chain issues.

Should these premarket losses hold, Under Armour stock will open at its lowest level since October 2020. Coming into today, the shares had already shed nearly 43% in the last six months, beginning to tumble after their November high of $27.28 and falling below the 320-day moving average by January. Year-to-date, UAA is down over 32.6%.

Analysts are yet to chime in on the results, but are mostly optimistic towards the stock. Of the 22 in coverage, 15 carry a "buy" or better rating, while seven say "hold." Plus, UAA's 12-month consensus target price of $25.48 is a massive 112.7% premium to current levels. Should this optimism begin to fade, the shares may drop lower still.

Meanwhile, short sellers are building their positions. Short interest rose 4.7% in the last two reporting periods, and the 17.28 million shares sold short account for 9.2% of the stock's available float.

Options traders targeted bearish bets ahead of the earnings event. This is per UAA's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 70% of readings in its annual range. This means that while calls still outnumbered puts on an overall basis, the latter were picked up at a quicker-than-usual pace in the last two weeks.

 

 

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