Does Under Armour’s 41% Share Price Slide Signal a Rebound Opportunity for 2025?

If you’re staring at Under Armour’s latest stock chart and scratching your head, you’re not alone. Many investors are wondering whether the current share price, recently closing at $4.76 after a painful 41.2% drop year-to-date, signals an opportunity or a warning. The performance over the past year doesn’t sugarcoat the story, with the stock down nearly 50%. But numbers alone rarely tell the whole tale, and that’s especially true for a name like Under Armour, a brand synonymous with athletic apparel innovation.

Recent market jitters, broader concerns about the retail sector, and shifting consumer sentiment have weighed heavily on Under Armour’s share price. It’s been a rough ride, no question, but that hasn’t stopped some investors from asking if all the negativity is already baked in. With a valuation score of just 1 out of 6 key undervaluation checks, it is clear that the market is skeptical, at least using standard metrics.

If you're wondering whether Under Armour’s beaten-down shares are ripe for recovery, or whether caution is still the wisest play, you’re in the right place. Up next, we'll dig into the most common valuation approaches, sizing up what they’re saying about the company right now. And stay tuned, because at the end of this article, I’ll share a perspective on valuation that goes beyond the typical scorecard.

Under Armour scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Under Armour Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates what a company is truly worth by projecting its future cash flows and then discounting those numbers back to today's value. For Under Armour, this means looking at both recent performance and what analysts expect for years ahead to gauge the stock’s real value.

Currently, Under Armour’s Free Cash Flow (FCF) is negative, sitting at -$310.7 million. Over the next several years, analysts expect some improvement, with projections suggesting that FCF could turn positive, reaching about $75 million by 2030. Notably, analyst estimates only extend for about five years, so estimates beyond that are extrapolations. These projections, together with a two-stage free cash flow to equity model, form the basis of the DCF analysis.

Factoring in all these estimated future cash flows, Simply Wall St’s DCF model calculates an intrinsic value of just $1.50 per share for Under Armour. This is dramatically lower than its current trading price of $4.76, implying the stock is roughly 216.6% overvalued according to this method.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Under Armour.

Our Discounted Cash Flow (DCF) analysis suggests Under Armour may be overvalued by 216.6%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Under Armour Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics for profitable companies because it directly compares a company’s current share price to its per-share earnings. For companies like Under Armour, which have reported profits, the PE ratio helps investors gauge how much they’re paying for each dollar of earnings, making it a relevant and useful measure.

Of course, just knowing the PE ratio isn’t enough. A higher PE might be justified for a company with strong growth prospects or lower risk, while a lower PE might reflect slower growth or higher uncertainty. That’s why it’s important to compare the company’s PE to both its peers and the industry overall.

Currently, Under Armour trades at a PE of 20.1x. That is slightly above the peer group average of 14.5x, and also above the luxury industry’s average of 19.4x. Simply Wall St’s proprietary metric, the “Fair Ratio,” takes this a step further by integrating elements like company-specific earnings growth, profit margins, risk factors, industry classification, and even its market capitalization to suggest an individualized benchmark. In Under Armour’s case, the Fair Ratio comes out to 25.5x, suggesting the business could support a higher valuation than the market or industry currently assigns.

What sets the Fair Ratio apart from typical peer or industry comparisons is its holistic approach. Rather than assuming all companies in a sector deserve the same PE, it incorporates Under Armour’s unique competitive position, its risks, growth outlook, and profitability, offering a more tailored measure of what’s “fair.”

With a current PE of 20.1x and a Fair Ratio of 25.5x, there is a meaningful gap in Under Armour’s favor. This suggests, by this assessment, that the stock is undervalued on a PE basis, even if headline numbers alone may not tell the full story.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Under Armour Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personalized story about a company, explaining why you believe it will succeed or struggle, which you support with your own assumptions about future revenue, profit margins, and what the business should fairly be worth.

Rather than just looking at historical numbers, Narratives allow you to connect your view of Under Armour’s strengths, risks, and industry trends with a forward-looking financial forecast and fair value estimate. This ties together "the story," such as wanting to see digital expansion or margin improvement, directly with the outcomes that matter for investment decisions.

Narratives are available to every investor on Simply Wall St’s Community page, allowing millions to easily craft, update, and compare their perspectives with others. When news or results come in, Narratives refresh automatically so your assumptions and fair value are always current.

You can then make more confident buy or sell decisions by seeing how your Narrative’s fair value compares to the latest share price. For example, some Under Armour Narratives estimate a fair value as high as $13.80 or as low as $4.00, depending on whether users are optimistic about the brand’s global expansion or cautious about ongoing margin pressures.

Do you think there's more to the story for Under Armour? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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