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- Under Armour's much-anticipated Steph Curry 5's are selling out.
- The brand's HOVR sneakers are also performing well.
- The trend strengthens Jefferies analyst Randal Konik's bull case for the sports-apparel retailer.
- Watch Under Armour trade in real time here.
One of Under Armour's most-anticipated products is living up to the hype, and that could mean big gains to come for its stock.
"Curry 5's are sold out in many sizes/colors, indicating strong sell-through," Jefferies analyst Randal Konik wrote in a note out to clients, in which he noted the sneakers just went on sale two months ago. He has a $29 price target — 32% above the stock's current level.
But that's not all, Under Armour's HOVR sneakers are also selling well. According to his social media checks, the sneakers were mentioned heavily this month. "Under Armour also drove 1% of total mentions as a “Best Seller” this month, with the HOVR Phantom being a callout," he said.
The recent trend marks a continuation of the success that Deutsche Bank analyst Paul Trussel spotted in April. "We have seen the $140 HOVR Phantom men's sold out in all colorways, while the women's is sold out in most sizes and colorways," Trussel wrote at the time.
Under Armour's brand is stacking up handsomely with the competition. In a space where heavy product discounts and promotions usually indicate weak demand and dying brand strength, Under Armour is thriving according to Konik's data.
Under Armour products as a percentage of the top 60 sellers on discount have been falling for much of the past year. In July, Under Armour's discounts accounted for 55% of the list, down from 82% a year ago. "We view this data as encouraging, and it reinforces our belief in the upside potential for UAA shares," Konik said.
Perhaps most importantly for the immediate term, Konik thinks the trend points to upside for Under Armour's second-quarter earnings results. The sales data, Konik says, supports management's gross margin guidance for the second-quarter.
"Buy this stock," he said.
Under Armour is up 45.51% this year.
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