(Note: The author of this fundamental analysis is a financial writer and portfolio manager.)

Under Armour Inc. (UAA ,UA) shares have already tumbled by about 50 percent over the past 52 weeks, but the athleisure company's stock could decline even further according to Susquehanna. The firm is calling for the stock to fall by 28% percent to $11, citing poor brand management. 

The downgrade underscores the analysis of a recent Investopedia article, where we noted that Under Armour was vulnerable to a nearly 70 percent decline based on valuation. Here's the problem: Under Armour's stock was way overpriced compared to healthier and better-positioned competitors such as Nike Inc. (NKE). 

Today, Under Amour's valuation remains rich even given recent declines. A technical analysis also suggests Under Armour stock is likely to move lower. (See also: ‘Dismal Sales’ to Send Under Armour Crashing: CFRA.)

UAA PE Ratio (Forward 1y) Chart

Overvalued 

Analysts are currently looking for Under Armour to earn only $0.33 a share in 2019, meaning shares now trade at over 46 times one-year forward earnings estimates. That's nearly double Nike's valuation at 24 times.

Nike is expected to grow earnings by almost 17 percent in 2018 and 2019, while Under Armour has a much harder path because analysts are estimating earnings to increase by about 15 percent in 2018 and then jump by almost 47 percent in 2019. 

No Top-Line Growth

To this point, it is hard to have any confidence as an investor in those estimates going out to 2019, because those projections have fallen by nearly 70 percent over the past year, from $1.06 to $0.32. Meanwhile, that jump in earnings is not coming from increasing revenue, because forecasts show that revenue is expected to grow by only 7.5 percent in 2019, meaning Under Armour is not going to be achieving that massive earnings jump from real top-line growth, but potentially from cost savings. 

Technical Breakdown

Even from a technical perspective, the stock appears to be in trouble. Shares have recently completed filling a gap created at the end of October 2017.

The stock recently hit resistance as well, at about $16.75, while the relative strength index reading has been trending lower since hitting overbought levels in mid-December. This suggests that Under Armour's stock is likely heading lower, and a break below the stock's uptrend around $14.50 would probably trigger that event. 

Under Armour finds itself in a tough position, and that means the stock will likely continue to struggle. But should the company finally be able to turn the corner and see meaningful top-line growth, perhaps its price can begin to recover. 

Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.