Under Armour 🎽

Regardless if you love loungewear or running marathons, Under Armour has taken the same technology used in leggings and created a whole performance range from it.

Involved in a few M&As and financial troubles, Under Armour has fought hard for it’s position.

Currently, the app shows them rather middle of the field, slightly expensive with medium quality and momentum. The sell-side analysis also agrees, with around 75% giving Under Armour a hold rating.

Though this might soon change.

Suspicious account practices, bringing forward payments to make struggling quarters look better than they are, have been flagged across the 2015 and 2016 accounts.

While this is far enough behind us I wouldn’t expect it to have a major effect on the current standing, but it will result in two outcomes.

  1. It is extremely likely we will see a fine to Under Armour, a large unexpected expense and during COVID is never welcome
  2. How trustworthy is management going forward, if they knowingly did this before can it happen again, we can expect an internal investigation results in managers stepping down or more independent board members being brought in.

In the short term, we can expect the market to react and squeeze the share price while an unknown fine is pending and managements role is undecided. Longer-term the company remains unchanged, though we will have to watch for any management shakeup.

It’s never good to see investors trust eroded, this will be an interesting thread to follow.