Credit markets are materially overstating UAA’s credit risk with a YTW of 7.467% relative to an Intrinsic YTW of 5.787% and a CDS of 320bps relative to an Intrinsic CDS of 219bps. Furthermore, Moody’s is materially overstating UAA’s fundamental credit risk with its Ba3 credit rating five notches below Valens’ IG4+ (Baa1) credit rating.

Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, all members of management have low change-in-control compensation relative to their average annual compensation, indicating they are not likely incentivized to pursue a takeover or accept a sale of the company, thereby reducing event risk for creditors.

Earnings Call Forensics™ of the firm’s Q1 2026 earnings call (08/08/2025) highlights that management is confident their brand health is improving each day driven by renewed narrative accurate media investments and they are getting better operationally each year. In addition, they are confident their compression base layer has seen great attention from customers.