Since I last checked in with Under Armour Inc (NYSE:UAA) back in early April, sentiment has been on the rise in the financial media. Under Armour’s distribution deals with Kohl’s Corporation (NYSE:KSS) and DSW Inc. (NYSE:DSW) have attracted quite a bit of headline attention, giving some investors hope that UAA stock could turn things around.

But I think the media is giving too much credit to these deals, especially with Nike Inc (NYSE:NKE) and Adidas AG (ADR) (OTCMKTS:ADDYY) ramping up competition.

As a result, this recent bout of optimism for UAA stock could have bearish consequences in the wake of Thursday’s first-quarter earnings report.

Why UAA Stock Is Doomed (For Now)

The fuel driving the distribution-deal narrative is that UAA should be able to once again expand its market share after rolling out shoes and athletic wear to more retail locations. But Under Armour has been in Kohl’s stores since February, and we saw how badly guidance from the company’s prior trip to the earnings confessional played out.

Under Armour will hit DSW stores in time for the back-to-school rush, but Under Armour will face the same challenges there as it did in Kohl’s, namely, Nike and Adidas have already established shelf space and market share at these locations. What’s more, Nike is apparently back with a vengeance in terms of athletic styling and pricing competition, and Adidas remains the retro styling king heading into the summer season.

That doesn’t leave much room for a floundering Under Armour, which is still trying to recover market share after tying itself too closely to the athleisure trend.

In fact, Wall Street’s earnings expectations for Under Armour have been in freefall for the past two months. At the beginning of the year, the consensus was looking for first-quarter earnings of 4 cents per share, flat with year-ago results (not a good starting point). But those expectations have come down steadily since, and expectations now rest at a loss of 4 cents per share, with revenue expected to rise a mere 5.9% to $1.11 billion.

What’s more, analysts are showing considerable doubts when it comes to UAA stock’s prospects. According to Oppenheimer:

“We think there’s a good chance company guides down 2Q17 sales, back-half loading ’17; assuming new distribution (KSS & DSW) contributes $130 million–$150 million in ’17 sales implies core business up HSD to hit consensus.”

Currently, Oppenheimer is among the 25 brokerage firms currently rating UAA stock a “hold” or worse with an “underperform” rating. Only eight analysts have doled out “buy” ratings on UAA shares, according to Thomson/First Call. The 12-month consensus price target rests just 14.9% above the shares at $22.35.

Options traders, however, appear to be quite bullish on UAA stock. Currently, the 28 April put/call OI ratio comes in at 0.52, with calls nearly doubling puts among options most affected by this week’s quarterly report. That said, with short interest accounting for nearly 13% of UAA’s total float, these calls may be more about hedging bearish positions than actual bets that the shares will rally.

Click to Enlarge Overall, 28 April implieds are pricing in a post-earnings move of about 9% for UAA stock. This places the upper bound at $21.25, with the lower bound arriving at $17.75.

Technically, $20 remains a significant hurdle for UAA stock, with the shares 50-day moving average currently perched in the region. It would take a rather positive report to overcome this resistance.

Near-term support at $19 is thin, however, and a breach here could send UAA toward $17.50 in a hurry.

2 Trades for UAA Stock

Put Spread: Positive coverage in the media can only take a stock so far. In fact, with a lack of fundamentals to back up those headlines, this attention could lead to a larger-than-expected selloff when earnings fail to live up to the hype this Thursday.

Traders looking to bet on a sell-on-the-news event this week may want to consider a May $17.50/$19 bear put spread. At last check, this spread was offered at 50 cents, or $50 per pair of contracts. Breakeven lies at $18.50, while a maximum profit of $2, or $200 per pair of contracts, is possible if UAA stock closes at or below $17.50 when May options expire.

Call Sell: Selling overhead premium is another way to profit from a poor earnings showing from UAA stock. Traders taking a more neutral-to-bearish stance might consider selling the May $22.50 call. If you already own UAA stock, this call sell allows you to offset some of your portfolio losses in the event of continued stagnation, but also allows you exposure to any upside up until the stock trades at or above $22.50.

At last check, this option was bid at 11 cents, or $11 per contract. A sold call allows you keep the premium as long as UAA stock closes below $22.50 at expiration. On the downside, if the shares rally above $22.50 prior to expiration, you could be forced to provide 100 shares at current market value for each call sold, which could be quite costly if you do not have enough stock on hand to cover the call.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.