It is time to "begin the process of redefining what it means to be a tech stock," as Under Armour has become a "new tech company," according to CNBC's Jim Cramer. UA from its outset "made a name for itself by inventing an entirely new category for sportswear." The company is “now giving us what we want to see from any great tech company: They’re moving beyond their core compression business and using technology to invent new products that will allow them to take share in additional markets.” UA has introduced charged cotton apparel, which "dries five times faster than normal cotton.” The company has also introduced a line of water-resistant hoodies called Storm “where water literally rolls right off,” and a “shirt that tracks the body's natural motion and biometric signals.” Additionally, UA has “built an ultralight running shoe that packs in a boatload of innovation.” Cramer noted, “Next month, Under Armour is launching their new Coldblack technology … that reflects the heat of the sun to make athletes like me feel cooler. They're introducing a new lightweight shoe designed to support all kinds of athletes, and the company is also making a major push to grow its underwear business this spring. Plus, they made big strides in appealing to women, a growing business for Under Armour that should get even better with the launch of Armour Bras this spring.” Cramer: “What's the point of all of these innovations? The goal for Under Armour is to grab a larger share of any given athlete’s closet. They (have) a phenomenal brand, and the company wants to put that brand to work by moving into new product categories in order to vastly expand its total addressable market." He added UA’s “emphasis on using innovation ... to build out its business is the reason why we’re willing to pay 29 times next year’s earnings for its stock." Cramer: "To be fair, that multiple isn’t as expensive as it looks when you factor in Under Armour’s terrific 20% long-term growth rate. That’s not the growth rate of an apparel company. It’s the kind of growth we associate with tech” (“Mad Money,” CNBC, 2/28).
