Under Armour Stock Price Hits a 22-Month Low On Earnings Miss And Coronavirus Fears

Shares of Under Armour plunged 14% this week after the retailer reported lower-than-expected fourth-quarter results, as well as disappointing sales forecast. As a result, the stock hit $15.02, which is the lowest it has traded since April 2018.

Fundamental analysis: Coronavirus to hurt sales in Q1

The company reported the fourth-quarter earnings that missed the analyst estimates as revenue came in at $1.44 billion, lower than the $1.47 billion expected by the market. Earnings were reported in line with the expectations, at $0.10 per share.

Moreover, Under Armour said it expects its 2020 sales to drop due to the expected Q1 hit from the coronavirus. The current estimates show a hit between $50 and $60 million for the first quarter. Sales in the Asia - Pacific region rose 9.8% in the fourth-quarter, the company said.

Under Armour’s performance in the North American market has slightly improved with sales up 1.9%. Still, North America is the region that worries analysts and investors. It looks like Nike and Adidas are fishes too big to swallow for Under Armour.

Technical analysis: A 22-month low in place

A revenue miss and lower sales forecast have forced the Under Armour stock price to hit the fresh 22-month low of $15.02. A break of this very important support for the bulls could facilitate much bigger losses for the retailer.

The bears will be targeting the area around the $13.50 mark next. The all-time low for the Under Armour stock is $10.42, printed in November 2017. Should negative headlines continue to persist around Under Armour, we may see a quick trip south to test these levels.

On the upside, the zone around $17.60 is the first big hurdle for the bulls on the way above $20.

Summary

Under Armour reported lower-than-expected fourth-quarter revenue, together with disappointing sales forecast. Coronavirus outbreak is expected to cost the company between $50 million and $60 million in lower sales. As a result, the stock hit the lowest levels seen since April 2018.