Under Armour, Inc. (UAA): A Bull Case Theory

We came across a bullish thesis on Under Armour, Inc. on M Squared Capital’s Substack by Matthew McClintock. In this article, we will summarize the bulls’ thesis on UAA. Under Armour, Inc.'s share was trading at $4.8600 as of September 16th. UAA’s trailing and forward P/E were 22.09 and 81.30 respectively according to Yahoo Finance.

Under Armour (UA) is generating renewed investor interest, driven largely by notable insider activity. Recently, all board members accepted RSU grants without selling any shares, and three key members—Robert Sweeney, Dawn Fitzpatrick, and Mohamed El-Erian—made outright purchases, with El-Erian buying for the first time since taking over as Chairman. This insider confidence signals conviction in the company’s turnaround strategy under CEO Mr. Liedtke, who is applying a playbook reminiscent of his Adidas tenure, including strategic partnerships and targeted marketing initiatives.

The brand continues to resonate strongly in North America and shows growing traction in EMEA, while peers like Nike may be constrained in spending on emerging trends, giving UA flexibility to capitalize on them. Current guidance and consensus appear conservative for both 2Q26 and FY26, with a reasonable EPS range of $0.05 to $0.25, suggesting potential upside if execution improves. UA is selectively expanding its retail footprint through boutiques, aiming to preserve brand value, and remains underrepresented at specialty running retailers despite opportunities to enhance exposure, particularly with the Halo shoe line, which has so far been concentrated in DTC channels.

While tariffs are expected to pressure North American gross margins by roughly 200 bps in 2Q26, this is unlikely to fully explain the significant EBIT margin compression implied by guidance. Additionally, a $27 million insurance benefit in 2Q25, though disclosed, was not factored into adjustments, highlighting conservative accounting tendencies.

With strong brand equity, strategic flexibility, and insider alignment, UA presents a compelling investment narrative with multiple catalysts for upside if operational execution and market recognition accelerate.

Previously we covered a bullish thesis on Under Armour, Inc. (UA) by MattJMcClintock in December 2024, which highlighted the company’s product inflection strategy, improved gross margins, disciplined inventory management, and targeted marketing initiatives. The company's stock price has depreciated approximately by 36% since our coverage. The thesis still stands as insider activity and strategic flexibility reinforce the turnaround story. Matthew McClintock shares a similar perspective but emphasizes insider purchases as a key catalyst.

Under Armour, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held UAA at the end of the second quarter which was 41 in the previous quarter. While we acknowledge the potential of UAA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.