Core Viewpoint - Under Armour's stock experienced a significant drop of 9.8% intraday following a downgrade by Citi analysts from "Neutral" to "Sell," despite the company reporting better-than-expected quarterly results and raising its outlook [1] Company Performance - Under Armour reported a total net revenue of $1.33 billion for the third quarter of fiscal 2026, reflecting a 5.2% year-over-year decline, but surpassing Wall Street's expectation of $1.31 billion [8] - The North America segment saw a notable revenue decline of 10.3%, with the footwear business experiencing a 12% drop in sales [8] Market Conditions - The apparel market is facing rising competitive pressure and economic headwinds, contributing to a modest 1.6% decline in Under Armour's stock over the past 52 weeks [4] - The company has a market capitalization of $3 billion and is known for its innovative performance sportswear and moisture-wicking technology [3] Analyst Insights - Citi analyst Paul Lejuez highlighted pressures in the North American market and a slowdown in the EMEA region as key concerns [1] - The analyst also warned of potential negative free cash flow for Under Armour in fiscal 2026 and challenges in growing EPS in fiscal 2027 [2] - Under Armour's stock is trading at a forward price-to-earnings ratio of 60.52x, significantly higher than the industry average of 17.98x, indicating a stretched valuation [6] Stock Performance - Following a recent earnings beat, Under Armour's stock had surged 41.35% year-to-date, reaching a 52-week high of $7.94 on February 9, but has since fallen 14% after the downgrade [4]