How bad has the run been for Under Armour (NYSE:UAA)? Down 55% over the past year, it's the single worst performer in the S&P 500. It's off more than 60% since hitting an all-time high 18 months ago.
The stock in now trading at just 1.6x sales estimates, writes Jack Hough - half the average of the past five years, 15% cheaper than the broad S&P 500, and more than 35% cheaper than Nike.
Yes there are challenges, but with so many markets still to tap, sales at UAA are likely to grow at a double-digit pace for years to come vs. single-digits for Nike. Hough reminds that Nike went through remarkably similar growing pains 30 years ago before rebounding to produce big returns (21.2 annually for three decades) for long-term holders.
A rise to just a market multiple means more than 30% upside for Under Armour over the next year.