5 Concerning Data Points Coming For Under Armour

Morgan Stanley's Jay Sole maintained an Underweight rating on Under Armour Inc UA, with a price target of $64.

"Based on our deep-dive work, we see data points suggesting some of UA's growth levers are dissipating and represent risks not priced in," Sole mentioned.

Although the analyst believes that Under Armour is a "terrific company" with a good management team and significant growth opportunities going forward, Sole expressed doubts regarding whether the growth justifies the current stock valuation.

Listing out the areas of concern, Sole mentioned that the company was likely report Q4 same-store sales of 0 percent to -3 percent. On the other hand, the ASPs for running footwear have declined 23 percent over the past two years, as compared to the 4 percent decline for the industry.

"Potential new US wholesale doors are predominantly in mid-tier, offprice, and family footwear channels, which we believe are inconsistent with UA's brand strategy," the analyst noted.

Under Armour has continued to lose market share in the U.S. wholesale women's apparel category, the company's accounts receivable grew 55 percent in Q4, while inventory expanded 46 percent, as compared to the 1Q16 sales guidance of 29 percent.

Sole explained that these issues would have been less of a concern had the stock been trading at a multiple that was in line with its peers.