Under Armour (NYSE: UAA) is a global sportswear company that designs and sells athletic apparel and footwear. It competes with industry giants like Nike and Adidas. Recently, Under Armour's stock price fell sharply after the company released a disappointing earnings report and a weak outlook for the future.
On May 12, 2026, analyst firm Stifel Nicolaus downgraded Under Armour to a 'Hold' rating from its previous 'Buy' rating. The firm set a new price target of $6.00. At the time, the stock's price was $5.03, which suggests a potential upside of 19.28% if the target is met.
This downgrade follows a weak fourth-quarter earnings report. The company's revenue decreased by 0.8% year-over-year to $1.17 billion. It also reported an adjusted earnings per share (EPS) of $(0.03), which missed analyst estimates by $0.01. This is a measure of a company's profitability per share.
A key concern is the company's falling gross margin, which dropped by 220 basis points to 45.5%. Gross margin is the profit a company makes on its products before deducting other business costs. As highlighted by MarketWatch, surging costs from tariffs and products are eating into Under Armour's earnings.
The North American market is a major challenge, with revenue there dropping 7% to $641 million. This decline is due to softer demand from wholesale partners and more promotions. Management identifies this region as its most significant operational hurdle, despite some growth in international markets.
