Is Under Armour Stock a Contrarian Bet?

Under Armour US9043111072

Shares of Under Armour have declined by more than 60% over the last year, but a new bullish call from Guggenheim is suggesting a potential turnaround. The firm has initiated coverage with a buy rating and a $6 price target, presenting a starkly optimistic view against a backdrop of widespread market skepticism.

Guggenheim analyst Simeon Siegel has set a price target of $6 for Under Armour, implying an upside of approximately 37% from the current trading level near $4.38. Siegel's thesis centers on the stock's valuation, which is hovering near multi-year lows. He posits that this creates an attractive entry point for investors willing to bet on a brand revitalization.

This stance directly contradicts the prevailing analyst consensus, which remains at a "Hold" rating. Other firms, such as Evercore ISI, maintain an "Underperform" rating with a $4 target, citing ongoing concerns about weak earnings prospects.

Institutional Activity and Fundamental Headwinds

Recent 13F filings reveal a divided institutional perspective. In a notable contrarian move, Soviero Asset Management LP increased its stake by about 85%. However, many other large investors continue to exhibit caution, reflecting the uncertain outlook.

The company's challenges are well-documented. Under Armour is grappling with inconsistent revenue growth, persistent weakness in its core North American market, and pressured profit margins. Management has labeled the current fiscal year a "transitional" period, emphasizing inventory reduction and cost structure improvements.

Leadership Change Aims to Accelerate Recovery

A key part of the planned turnaround is a leadership shift. Reza Taleghani is scheduled to assume the role of Chief Financial Officer in February 2026. The company expects him to enforce stricter financial discipline and accelerate the execution of its recovery plan.

Investors may get an early read on the effectiveness of these measures when Under Armour reports its third-quarter results for fiscal 2026 in early February. These figures will be closely scrutinized for signs of operational progress.