Under Armour Stock Rallies After Blowout Earnings
Most analysts remain wary of the apparel stock, though
A big earnings winner this morning is Under Armour Inc (NYSE:UAA), after the athletic apparel maker reported first-quarter adjusted earnings of 5 cents per share, surpassing estimates. In addition, revenue also topped expectations, and the company lifted its fiscal-year profit outlook. Strong demand from outside the U.S. markets helped fuel the blowout report.
In response, Under Armour stock is up 7.1% to trade at $23.60, on track for its best day since Oct. 30, and one of the top performing stocks on the S&P 500 today. UAA had dipped 4.6% yesterday as analysts braced for a sub-par quarterly report, but found support at their 50-day moving average.
The shares remain a hair off their Dec. 3, 23-month high of $24.95. However, of the 22 brokerages covering UAA, 16 rate it a "hold" or worse. And the average 12-month price target of $21.32 is a discount to its current perch, so a round of overdue upgrades and/or price-target hikes could catapult the security higher.
A short squeeze could also keep the wind at UAA's back. The 28.33 million shares sold short represents a healthy 7.5% of the stock's total available float. At its average pace of trading, it would take more than seven days for shorts to buy back their bearish bets, plenty of fuel for a short squeeze to drive additional gains.