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Under Armour Inc (UAA) Stock Is Too Frothy for Middling Performance

I like Under Armour Inc (NYSE:UAA) as a company. I really do. The story of CEO Kevin Plank’s rise from University of Maryland football walk-on to S&P 500 CEO is a great tale. The problem is that alone isn’t enough to buy UAA stock.

Under Armour Inc (UAA) Stock Is Still Too Expensive -- And May Be For A While

Sure, Plank took Under Armour from an upstart company with zero sales to competing with behemoths like Nike Inc (NYSE:NKE) and adidas AG (ADR) (OTCMKTS:ADDYY). It’s an impressive accomplishment. Still, not convincing enough to own the UAA stock right now.

At the moment, UAA stock finally has settled down, below and near $20 since late January after an ugly 2016. (The Class C shares, ticker UA, are a bit cheaper, a premium that still offers an arbitrage opportunity.) But, not cheaper enough, or even close. A 48x multiple to 2018 analyst estimates prices in a tremendous amount of growth. And I remain skeptical that growth is on the horizon for Under Armour.

To his credit, Plank has responded to the decline in UAA stock by promising to improve Under Armour’s operations. At the shareholder meeting earlier this month, the CEO reiterated that the company was focused on execution and getting the...