Under Armour (NYSE:UA) stock is finally fully saturated with the most bullish expectations for this growth story to continue to accelerate. At these levels, then, I believe the upside is limited. I am buying put options in the UA stock here, and recommend others to do the same. We will look to enter for call options at considerably lower prices.
Under Armour management recently said it will be able to grow revenues to $7.5 billion by 2018, and shares have surged to just north of $104.
But at $104 per share, all of this is fully baked into the valuation. Simply said, there just isn’t any upside from a fundamental, intrinsic value standpoint here. The stock may rally more on momentum, but shares today aren’t worth anything more than $104 per share, even under bullish growth assumptions. After seeing share price appreciate more than 45% from our first article on February 3, we believe it is now time to buy put options.