Athletic apparel manufacturer Under Armour (UAA) is down 12% over the past year, far underperforming the market’s strong rally. One trader sees shares continuing to underperform through the end of 2026.
That’s based on the December 18 2026 $10 puts. With 729 days until expiration, 4,889 contracts traded compared to a prior open interest of 161, for a 30-fold rise in volume on the trade. The buyer of the puts paid $2.68 to make the bearish bet.
Under Armour shares recently traded for about $8.60, meaning the option is already $1.40 in-the-money, leaving about $1.20 in option premium for two years to play out. UAA shares are still well off their 52-week low of $6.17.
Operationally, Under Armour had a mixed year. Revenues slid by 11%, but earnings rose by 63% thanks to improving costs. While shares trade at about 13 times earnings, forward estimates are less attractive at 35 times earnings.
Action to take: Shares have started to trend lower again, so investors interested in shares should hold off for now or look elsewhere. UAA is somewhat inexpensive on a valuation basis, but could get cheaper before a turnaround.
For traders, the December 2026 $10 puts are attractive for further downside in shares over the next two years. Traders could potentially see mid-double-digit returns, and should look to take a quick profit if UAA starts to re-test its prior 52-week lows.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.