FBR Sees Domestic Strength, Solid International Trajectory Increasing Growth Visibility At Under Armour

In a report published Wednesday, FBR & Co. analyst Susan Anderson suggested that Under Armour Inc (NYSE: UA) could see its revenue jump to $8.9 billion in 2018 and climb to "well over" $10 billion the following year.

According to Anderson, Under Armour could reach 20 percent international penetration by 2018 and 18 percent North American footwear penetration at the same time. The analyst said this implies the company can at least post high-20 percent revenue growth for the next several years with potential upside to low-30 percent given the status as "the next" global athletic apparel and footwear brand.

Anderson continued that Under Armour's growth trajectory is similar to Nike Inc (NYSE: NKE). In fact, Under Armour is projected to breach the 10 percent international penetration threshold this year, 19 years after the company was founded, comparable to Nike. Nike reached 20 percent international penetration 21 years after it was founded, corresponding to Under Armour achieving a similar accomplishment in 2018.

The path to Under Armour's growth lies in its apparel and accessories sales which are expected to grow at the mid-20 percent level over the next few years. However, footwear will be the "dominant driver" of North American growth, reaching $1.6 billion by 2018.

International growth is possible given a more developed market, the company's ability to penetrate markets more quickly through e-commerce, improved infrastructure (such as transportation infrastructure in developing economies), advancements in supply chain innovation and a more rapidly growing sportswear market.

Shares remain Outperform rated with a price target raised to $92 from a previous $90.