Financial Contrast: Under Armour (NYSE:UA) & NIKE (NYSE:NKE)

Under Armour (NYSE:UA) and NIKE (NYSE:NKE) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Valuation & Earnings

This table compares Under Armour and NIKE”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Under Armour	$4.97 billion	0.42	-$495.64 million	($1.15)	-4.21
NIKE	$46.40 billion	1.16	$3.11 billion	$2.09	17.43

NIKE has higher revenue and earnings than Under Armour. Under Armour is trading at a lower price-to-earnings ratio than NIKE, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Under Armour has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500. Comparatively, NIKE has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Institutional and Insider Ownership

36.3% of Under Armour shares are held by institutional investors. Comparatively, 64.2% of NIKE shares are held by institutional investors. 15.6% of Under Armour shares are held by company insiders. Comparatively, 1.1% of NIKE shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Under Armour and NIKE, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Under Armour	2	1	0	0	1.33
NIKE	6	21	9	1	2.14

Under Armour currently has a consensus price target of $5.50, suggesting a potential upside of 13.59%. NIKE has a consensus price target of $48.91, suggesting a potential upside of 34.25%. Given NIKE’s stronger consensus rating and higher possible upside, analysts plainly believe NIKE is more favorable than Under Armour.

Profitability

This table compares Under Armour and NIKE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Under Armour	-9.99%	4.04%	1.37%
NIKE	6.70%	16.54%	6.21%

Summary

NIKE beats Under Armour on 13 of the 15 factors compared between the two stocks.

About Under Armour

Under Armour, Inc., together with its subsidiaries, develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth. The company provides its apparel in compression, fitted, and loose fit types. It also offers footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company provides accessories, which include gloves, bags, headwear, and sports masks; and digital subscription, advertising, and other digital business services. It primarily offers its products under the UNDER ARMOUR, HEATGEAR, COLDGEAR, HOVR, UA, PROTECT THIS HOUSE, I WILL, UA Logo, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through a network of 439 Brand and Factory House stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Under Armour, Inc. was incorporated in 1996 and is headquartered in Baltimore, Maryland.

About NIKE

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also sells a line of performance equipment and accessories comprising bags, sport balls, socks, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. In addition, the company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel; and licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.