Harley-Davidson Inc (NYSE:HOG) stock is down big today after reporting second-quarter revenues that missed the mark. The results were so bad, management was forced to substantially cut its full-year 2017 shipment guide. That sent investors into panic mode. HOG stock is down about 10% as of this writing.

The global retail environment for motorcycles remains challenged by secular trends, and HOG stock is really feeling this pain. Year-to-date, HOG stock is down almost 20% while the S&P 500 is up close to 10%.

Does this underperformance make HOG stock an attractive “buy the dip” candidate?

Let’s see.

Tough Quarter Underscores Adverse Secular Trends for HOG

Harley-Davidson has had a few bad quarters in a row now, and its just getting worse. Two quarters ago, worldwide retail motorcycle sales fell 0.5% while U.S. retail motorcycle sales actually rose 0.1%. That isn’t great, but its not bad. Investors were hopeful that there were some signs of motorcycle demand stabilization.

Unfortunately, that wasn’t the case. In fact, things have gotten much worse over the past two quarters for HOG. Last quarter, worldwide motorcycle sales fell 4.2%, led by a 5.7% decline in the U.S. This most recent quarter was even uglier. Worldwide motorcycle sales fell 6.7%. U.S. sales dropped a whopping 9.3%.

The rapid deceleration in motorcycle sales globally forced HOG management to lower their full-year shipment guidance. Whereas HOG management previously called for full-year shipments in 2017 to be flat to down, modestly, from 2016, the new guide calls for a 6% to 8% decline. That roughly 7% decline would lap a 1.6% decline in shipments in 2016. So on a two-year stack basis, shipments are down just under 9%.

That’s no good, and it underscores the fact that Harley-Davidson is on the wrong side of secular trends.

The rise of the at-home economy has decreased the need for consumers, especially those in urban areas, to own a car. Car ownership rates are already falling, as the number of no-car households has increased by about 500,000 over the past five years. That uptick is significant because it breaks a 50-year trend of a decrease in the number of no-car households.

What’s the difference between the previous five years and the past 50 years? Uber. Lyft. Postmates. Same-day delivery. Netflix, Inc. (NASDAQ:NFLX). A plethora of services have come to the forefront, which make it possible for consumers to do everything they need to do without the hassle of owning a car.

That’s not good for Harley-Davidson, because not only does it sell motorized vehicles, it sells a niche sub-segment of motorized vehicles. If the mass market is declining, so will the niche market; and perhaps by even more as motorcycles begin to lose their “cool” factor.

The Valuation on HOG Stock Needs to Come Down

Here’s the thing about HOG stock: it still isn’t cheap enough to buy considering the secular risks described earlier.

Even after today’s selloff, HOG stock still trades around 11.4-times next year’s consensus earnings estimate. That isn’t a great multiple, especially considering earnings are down 13.1% so far in fiscal 2017.

Over the next five years, analysts peg growth at around 9% per year. Again, an 11.4-times multiple for 9% growth seems rich. Why should a stock with several secular headwinds trade at a premium to growth?

That is especially true when looking HOG’s balance sheet. Cash is up 14% year-over-year to roughly $988 million, but that pales in comparison to the mountain of debt sitting on Harley-Davidson’s balance sheet. HOG has about $7.2 billion in debt, given the company a net debt position of about $6.2 billion. That is huge considering HOG stock has a market cap of under $10 billion.

Moreover, looking at the valuation chart for HOG stock, the stock’s price-earnings multiple tends to go on long runs of multiple expansion and multiple compression. Right now, it looks HOG stock is still in the beginning of a multiple compression run. From this standpoint, we identify valuation risk over the next several months.

With secular trends weighing on demand and the valuation still rich, there is no reason to buy HOG stock now.

As of this writing, Luke Lango did not hold a position in any of the aforementioned securities.