There are a lot of reasons to be bullish on Under Armour. Compare their market cap to the size of their brand. One is small, the other is huge. Consider how many college athletic programs they supply. But I'd like to focus in on one speculative reason today to consider UA.
In 2012, Reebok's exclusive license with the NFL to provide all uniforms and all merchandising apparel will expire. This may sound like a long ways away, but there is a 12 - 18 month lead time to build up the manufacturing process, so the last half of 2010 is likely when the decision will be made.
Since Reebok won this contract early last decade, Under Armour has grown precipitously. Reebok got bought by Adidas.
And recently the Supreme Court cleared the way for the possibility that multiple companies could win merchandising deals. I don't see it as very likely that the various teams, even if they were allowed to, would negotiate separate deals.
But I think UA is the type of company, small though they are, to go after a giant win like the NFL deal. Do I have anything to back this up?
Well, there was this hush-hush meeting between Roger Goodell and Kevin Plank last May.
It's not much to go on, but I think there's something there. Now would UA win the contract, even if they're going for it? I think they'd have a solid chance. Of course the NFL wants to get as favorable of terms as possible. But there might be some issue of what is the quality of the product.
And in that department I really think UA's products would be superior. All that compression gear and ColdGear / HeatGear etc, plus they do lots of college football uniforms already. I will comment below if I can find some more evidence that NFL players tend to be UA fans.
I've been following this company and this stock a while, and I think it's poised to break out soon.