As Nike is to the NFL, Under Armour (NYSE:UA) is trying to be to the collegiate ranks. In fact, along with Adidas (PINK:ADDYY), UA is fighting tooth and nail to outfit as many collegiate teams as possible.
Founder Kevin Plank attended the University of Maryland, so getting them on board was easy; it has a couple SEC members, University of South Carolina and Auburn, under wraps; and Texas Tech and Hawaii are on board, too.
Not that UA is thumbing its nose at the NFL. It’s the title sponsor of the NFL Combine, it has numerous player-specific sponsorship deals, and for those of us in Maryland, UA has a 10-year naming agreement for the Baltimore Ravens’ team practice facility.
UA completed a stock split last month as its shares continuously broke new higher ground, and the stock has continued to run after the split. All told, Under Armour has gained nearly 60% in 2012 — continuing a nearly 350% surge in the past three years.
Under Armour is projected to grow nearly 30% the next two years. And you’ll pay for that growth, too. Shares trade at nearly 60 times trailing earnings, more than 30 times forward earnings and a lofty price/earnings-to-growth ratio of 2. And there’s no dividend to tide you over during rocky patches.
But anyone who has read my previous articles will know that I am an unabashed Under Armour fan. With Plank at the helm of an innovative juggernaut and merchandising machine, UA shares should continue to thrive.