'Under Armour Is A Top Pick For Long-Term Growth Investors,' Susquehanna Says

Naming Under Armour Inc (NYSE: UA) as a top pick for long-term growth investors, Susquehanna’s Sam Poser mentioned the recent stock volatility offers a “rare” buying opportunity for “one of the best growth equities in U.S. Consumer.”

Poser initiated coverage of the company with a Positive rating and price target of $50.

Top Pick

“We recognize that the stock is not cheap, but in this case you get what you pay for. That is, a stellar brand that will not be compromised by management and an exceptional growth algorithm for a business that is a long way from maturity,” the analyst explained.

Poser believes Under Armour’s “brand first” approach would drive continued revenue growth of 25 percent, driven by growth in distribution points, footwear and International.

Related Link: The Way Your Shoes Are Made Is Rapidly Changing

Multiple Opportunities

The company has until now only sold 11,000 points of distribution domestically and is expected to “methodically” expand its business.

International opportunities also continue to be robust, despite the 10 successive quarter of more than 50 percent growth.

“In the footwear business, we continue to expect robust growth and higher ASPs, as UA is evolving into a true footwear brand with incredible strength in basketball, running, and golf,” Poser stated.

In addition, the apparel business continues to be strong, with distribution poised to expand beyond the athletic category over the next five years.

The analyst believes “the recent final closure of TSA stores and subsequent boost to retailers' businesses can be a source of upside.”

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