Jan 31, 2017 - Economy & Business

Here's why Under Armour stock is in freefall

Mark Lennihan/AP

Under Armour shares fell more than 28% on Tuesday, following a disappointing earnings announcement in which it dramatically dialed back expectations for revenue growth in 2017.

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Data: Money.net; Chart: Andrew Witherspoon / Axios

Why investors are grumpy: Under Armour is a quickly growing company, gunning for well-established brands like Nike. It's stock price relative to its actual earnings has been more than three times the average consumer goods firm, and that means that investors must see very large, continuous revenue gains to continue to hold the stock. Even though Under Armour projects 11% or 12% top-line growth this year, that was roughly half what analysts were expecting.

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