Athletic apparel-maker Under Armour Inc (NYSE:UAA) reported what ostensibly looked like a “good enough” quarter on Tuesday morning (5/1). Headline revenue and earnings came in ahead of expectations, and the full-year 2018 guide was maintained. But Under Armour stock dropped big on the news.

Shares opened up more than 5% down. They’ve rebounded since, but still remain down about 3% as of this writing.

Why the big drop despite the ostensibly strong numbers? Because under the hood, the numbers aren’t that great. International revenue growth is cooling off quickly, a big red flag for investors who saw the North America business go from 25% and up growth rates to declines in just a few quarters.

Meanwhile, gross margins are still depressed thanks to an adverse channel mix, and management continues to fail to pivot away from performance and into lifestyle.

All together, the Q1 earnings report simply gave the bears more ammunition as to why Under Armour stock won’t turn things around any time soon. International revenue growth is slowing, margins are dropping, and the product portfolio isn’t expanding.

As such, I maintain my call that Under Armour Stock isn’t worth much more than $16. At $17 and change, then, UAA stock looks overvalued to me.

Here’s a deeper look:

Under Armour Growth Story Is Still Broken

The quarter did nothing to address my concerns related to Under Armour’s deteriorating brand image and eroding growth trajectory.

Total revenue growth in constant currency was 4%. That is the same as last quarter despite stabilization in the North America business (revenue declines in North America improved from down 4% to down 1%). The reason for the sequentially flat revenue growth rate is a relatively huge fall-off in in international revenue growth.

Last quarter, international revenues rose 43% in constant currency. In the year ago quarter, international revenues rose 57% in constant currency.

In the first quarter, international revenues rose just 19% in constant currency.

That is a pretty big and rapid slowdown from nearly 60% to below 20% in just a few quarters. It is eerily reminiscent of the slowdown in the North America business, which went from 25% and up growth rates a few years ago to negative today.

In other words, all signs point to the international business following in the footsteps of the North American business. That means revenue declines in the international business are coming in the near future.

Meanwhile, the North America business is stabilizing, but that is after several quarters of rather sizable declines. Plus, the company isn’t taking the right steps to reclaim market share. Industry leaders Nike Inc (NYSE:NKE) and Adidas AG/S ADR (OTCMKTS:ADDYY) are pivoting from performance brands into lifestyle brands with wider reach and enhanced popularity.

Under Armour isn’t doing this. If anything, it sounds like UAA is doubling down on performance. That isn’t the right move. No performance shoe cracked the top 10 best selling athletic shoes list of 2017.

Plus, enhanced popularity as a lifestyle brand only increases Nike and Adidas’ popularity as performance brands, too. Just look at how Nike is killing Under Armour in the basketball footwear category.

Then there is the whole concern with margins. Other bears and I have called UAA out on this before. The company is shifting sales from full-price, premium retailers to mid-price, discount retailers like Kohl’s Corporation (NYSE:KSS). You can’t do that without margins being impacted.

Indeed, gross margins are still falling, mostly due to this adverse channel shift. The problem is that by doing this, UAA has diluted its brand image. Therefore, a return to peak gross margins seems unlikely because consumers are now used to paying discount dollar, not top dollar, for Under Armour product.

Bottom Line on Under Armour Stock

Nothing in the Q1 earnings report assuaged my going concerns with the company. The international revenue growth trajectory continues to point to declines in the near future. Management continues to fail to pivot into the lifestyle category. And gross margins remain depressed thanks to an adverse channel shift that has permanently affected the brand.

All together, my outlook before the earnings report remains the same today. This is a mid single-digit revenue growth story with limited margin drivers. That leads me to believe UAA stock is worth around $16.

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