On a day when the broader markets surged higher on trade war resolution optimism, shares of athletic apparel company Under Armour (NYSE:UAA) didn’t join the big rally. Instead, they did the opposite. As of this writing, all major indices have begun trending up and out of their correction. Under Armour stock, meanwhile, is down more than 17% in December alone.

Why? Investor Day. Under Armour had its big 2018 Investor Day on Wednesday. Under Armour stock had been bid up ahead of the event as investors anticipated management to wow the market with aggressive five-year sales and profits targets.

That didn’t happen.

Management targets that were just average. Improving, but not great, revenue growth trends through 2023. Margins are expected to improve, but not by a jaw-dropping amount. Overall, the Investor Day presentation simply confirmed what the market already knew: North America growth is stabilizing, international growth is rapidly slowing, margins are improving and the five-year forward growth trajectory is simply good, not great.

As such, Under Armour’s Investor Day was a disappointment for the market, and Under Armour stock dropped in response.

All things considered, Under Armour stock starts to look appetizing below $20. But, the company’s disappointing Investor Day confirmed that paying more than $20 for this stock is simply too much.

Why Investor Day Was a Disappointment

There was a lot of optimism surrounding Under Armour stock heading into the Investor Day. Analysts were saying that it could serve as a catalyst for the stock, and that overarching five-year revenue and profit targets would eat away at the bear thesis and give credence to the bull thesis. As such, you had a bunch of investors buying Under Armour stock heading into Investor Day on expectations that management would unveil double-digit revenue growth or huge margin expansion.

Instead, when Investor Day rolled around, management unveiled much less optimistic targets. Revenue growth is supposed to run around a mid- to high-single-digit rate over the next five years. Margins are expected to rebound, but only to just over 10% by 2023. Those targets simply aren’t that great.

Investors sold. The stock dropped. On a high level, the post-Investor Day selloff in UAA stock is that simple.

Upon closer inspection, there were some other red flags in the Investor Day presentation. Namely, North America growth isn’t expected to bounce back in a big way, and is expected to remain in the low single-digit range into 2023. Growth in Europe, Middle East and Africa is expected to slow from the mid-20s to a high single-digit rate by 2023. Asia Pacific growth is expected to slow from the mid-30s to the mid-20s during that stretch.

Overall, the market received confirmation that the North America business will remain a low-growth operation, and that the international business is turning into a low-growth operation. Granted, margins throughout the business are expected to improve over the next several years. But at a triple-digit forward earnings multiple, Under Armour stock was already priced for this margin expansion.

As such, Investor Day didn’t give the bulls any more firepower. Instead, it confirmed bearish trends. If those bearish trends materialize over the next five years, Under Armour stock isn’t worth much more than $20 today.

Under Armour Stock Looks Good Below $20

Above all else, Investor Day confirmed that Under Armour is a company with a stabilizing North America business, a slowing international business and improving margins. If you put all those together, it’s easy to see that Under Armour stock isn’t worth much more than $20 today.

Revenue growth at Under Armour has run around the low to mid-single-digit range in 2018. That is with a flattish North America business and an international business growing at a 20% clip. Over the next several years, North America growth will pick up to the mid-single-digit range. International growth will taper off to 10% to 15%. Overall, that should lead to a fairly consistent mid-single-digit total revenue growth through 2023, consistent with management’s targets. Under that assumption, revenues should hit somewhere north of $6.5 billion by 2023.

Margins across the board are expected to improve, as they should. They are currently at very low levels. In a five-year window, it isn’t unreasonable to assume that gross margins return to 48% highs, while the SG&A rate keeps dropping from opex leverage. Thus, operating margins have lots of room to expand over the next five years. Indeed, 10%-plus operating margins seem doable by 2023.

Assuming a normalized tax rate and stable share count, the aforementioned assumptions make $1 in EPS seem achievable in five years. A Nike (NYSE:NKE) level 30 forward multiple on that implies a four-year forward price target of $30. Discounted back by 10% per year, that equates to a 2018 end price target for Under Armour stock of just over $20.

Bottom Line on UAA Stock

Investor Day was a huge disappointment for UAA investors because it confirmed bearish trends without impressing bulls. The post-Investor Day plunge brings UAA stock back down to more normal levels, and investors should be cautious. But below $20 might be a fair price to pick up some Under Armour stock.

As of this writing, Luke Lango was long NKE stock.