Wall Street analysts have questioned Under Armour’s leadership, creative direction and new product pipeline as the brand has struggled for more than a year.

But one analyst said he’s seen “massive” improvement recently in product design and the ability to drive demand and create social buzz.


A lot of that has to do with Stephen Curry and the NBA superstar’s latest signature basketball shoe for Under Armour, wrote Randal J. Konik, an equity analyst with Jefferies LLC, in a report.

On Friday, Under Armour launched the first widely available version of the Curry 5 on the company’s website, just ahead of the Golden State Warriors’ weekend Game 3 against the Houston Rockets. Curry led the Warriors to a win, scoring 35 points.

The latest Curry 5, an update of the Curry 4, features a white knit base, multicolor overlay and low-top design.

“Programmed for maximum unpredictability, the lightweight, precision-fitting Curry 5 was developed to help Stephen optimize his on court performance,” Under Armour said on its website of the $130 shoe.

The sneaker offering, along with Under Armour’s HOVR running shoes and its Project Rock collection, “shows massive improvement in product design but also in driving demand and social buzz,” Konik said. “Better product, better managment of the business, improved cost structure...low expecations, and hatred by the Street means this stock should go higher, in our view.”

Under Armour rolled out a new ad campaign Thursday called “Will Finds A Way,” starring Dwayne “The Rock” Johnson and eight unconventional athletes.

Konik, who has a buy rating and price targe of $24 per share on Under Armour stock, said the design and color patterns on the latest Curry have been met with great social media buzz, “which makes us believe the product will sell out in short order.

“We also believe the choice to make the product a “low-top” is smart given basketball shoe trends have been moving more and more away from ‘high-tops.’”

And he applauded the brand for teasing, not flooding, the HOVR and Curry 5 into the market to maximize social media buzz, which in turn is driving consumer demand.

“This is a very smart way to market products and we anticipate [Under Armour] leadership to continue this approach going forward across all product lines/categories,” Konik said.

Nothing is structurally broken with the brand or business, said the analyst, who expects revenue growth to recover and international markets to expand, leading to improved profit margins and earnings. Konik urged investors to look at the brand over the long term.

“This is the brand for today’s youth, data shows us Adidas share has peaked,” Konik said, “and Under Armour is a global brand.”