UA Shares Fell Below 20% In Three Months, High Investment And High Returns.

"Three years ago, when I was the chairman, Lulu lemon had a market value of two times that of UA. I wanted to buy UA," Wilson, founder of Lulu lemon, said recently in an interview with Bloomberg TV GO.

The market value is almost three times that of Lulu lemon.

One consensus is that over the past two years, the growth of UA's performance has been almost explosive.

From the end of 2012 to the end of 2015, the comparison of Lulu lemon and UA performance

Their earnings data are also pretty good. Net revenue (net sales revenue) has increased by more than 20% in 22 consecutive quarters, and the latest 2015 third quarter revenue has reached US $1 billion 204 million (historically, for the first time in the single quarter, more than 1 billion US dollars). The group's expected revenue for the whole year will increase by 27% to 3 billion 910 million dollars over the 2014 fiscal year.

In addition, in 2015, the layout of UA was all-around: it spent a total of $more than 700 million to acquire several fashionable fitness and community applications such as MyFitnessPal, MapMyFitness and Endomondo, signed with Jordan Spieth, the world's first international golf team in 2025, signed the "megalith" Johnson; in September, UA founder and CEO Kevin Planck joined hands with Xinke NBA champion, and the warrior's star crow completed the first "China trip"; the more intuitive result was that they surpassed Adidas in the North American market and became the second largest sports brand outside Nike.

"Our continuous innovation has been successful in 2015, and more complete product categories have helped the performance of athletes."

In a statement, Planck said.

K UA share price k chart

In September 16th this year, investors' open day, UA's management looked forward to the market, and revenue in 2018 will reach 7 billion 500 million dollars, and the compound growth rate will remain around 25% in the next three years.

On the second day, the capital market was favorable, and the stock price of UA on NYSE rose to $105.89 / share, creating the highest point after May 2014.

But it is embarrassing that since then, the company's share price has been in a downward trend of volatility, three months later, in December 17th, UA's share price fell to 83.11 U.S. dollars / share, or 21.5%.

In contrast, Nike, the main rival, has climbed to $135 in the NYSE since September this year, from $94 to the end of last week, closing at $128.

Another comparable figure is that the Dow Jones index, which represents the rise of the New York Stock Exchange mainstream listed companies, has risen from more than 15000 in September to 17000 at present.

The fall and rise of the reaction reflect investors' expectations of the company's performance prospects.

It has been well received by users, the media and the public. The news is beautiful, and the product concept is new. UA is growing rapidly. Why is it cold in the capital market?

In lazy bear sports, there are probably three reasons behind it.

First, executives announced their resignation.

In the past three months, the biggest news of UA is nothing more than the news that Beijing's UA and COO CFO brandy di - Elson on February 2016 broke up in February 2016.

Management changes may be personnel adjustment, but it also shows that there are variables at the top of the company. For investors in the two tier market, change means risk.

In fact, when the news came out, it immediately responded to the stock price.

In October 14th, UA shares fell to 97.28 yuan / share, down 3.97% from the previous trading day.

Second, accelerating mergers and acquisitions and overseas plans may be accompanied by high risks.

In 2015, the biggest success of UA's business strategy might be the influence of the warriors who led the champion in the Treasury.

With the popularity of Curie, the company is also planning to expand their overseas expansion plan.

According to the previous company's statement, in September this year, UA will add a new store every day in the overseas market.

"Our company is still very young, this is the beginning. Our overseas market must grow by 50% every year," Planck said in the three quarter of this year's earnings conference call.

He also said that Stephen Curry products will be sold as a flagship brand in China and other Asian countries.

Overseas plans, UA in the United States in the M & a cooperation is also ongoing, the acquisition of fitness community App, and HTC cooperation in the introduction of wearable devices, signing various stars.

However, this rapid and highly aggressive expansion plan may also be another reason why capital is aware of risks.

Look at UA's competitors. Nike's performance stock price has risen all along since 2014. After completing the contract with James this year, the field of global sports equipment still stands out.

Skech has suddenly become the second largest brand in the American sports shoes field. Behind it, there are also ADI and Lulu lemons who aim at China and Asian markets.

Gao Kuozhang, high investment, often accompanied by high-risk, especially in the face of unknown overseas markets, let the outside world generate another view, UA will continue to express the rapid growth of previous performance.

Third, the share price rises too much, and the organization downgrades the stock price.

Perhaps many people have not noticed that, before the UA share price slide, Credit Suisse, one of the largest financial groups in the world, issued an investment view of UA's stock in September 14th.

Considering that the stock price of UA has risen sharply, Christian, a group analyst, has lowered the UA rating from "winning the market" to "neutral".

Buss said in his research report that he is optimistic about the long-term profitability and growth potential of UA, but believes that the current stock price has balanced its risk and return.

3 days after the report, UA shares began a downward trend in this round.

Obviously, after 22 quarters of high performance growth, the company has gained a crazy performance in the capital market in the past year.

From last October to September this year, the company's stock started at $60, rising steadily, breaking through the $100 mark, and the corresponding P / E ratio also came to 80 times.

By comparison, Nike, the absolute leader of the industry, now has a price earnings ratio of only about 30 times.

Market expectations for UA's sustained high growth are quietly changing.

High price and high P / E mean high valuations. Institutions and investors see the risk of continuing to catch up. Capital outflows and stock price turns are inevitable.

Compared with executives turnover, strategic adjustment, this is the direct reason for the decline of UA share price.

However, the performance of the stock market is always linked to the fundamentals and performance of the company. When the overseas strategy falls and the competitors face the challenge, the capital side who turns to the waiting period will redefine the investment expectation of the company.