Blue jeans giant Levi Strauss (NYSE:LEVI) made its return to Wall Street in March. It was a huge success. LEVI stock opened more than 30% above its $17 IPO price, and closed its first day of trading even higher.

But, ever since that big IPO surge, LEVI stock hasn’t gone anywhere. Through April, May, and June, the stock simply bounced between about $20 to $24. Today, LEVI stock trades hands around $23, only a hair above its first day closing price.

To some investors, this sideways trading in LEVI stock has been surprising, especially given the red-hot IPO backdrop — think Beyond Meat (NASDAQ:BYND) and Zoom Video (NASDAQ:ZM). To me, though, LEVI stock falling flat hasn’t been surprising in the least.

I warned early on that investors shouldn’t buy into the Levi Strauss IPO hype. This isn’t a plant-based meat maker or a video conferencing company with huge secular demand tailwinds. It’s a blue jeans company with stable growth prospects, but also sizable headwinds from the rising athleisure demand. As a blue jeans company with stable growth prospects but some demand headwinds, LEVI stock was fully valued in the low $20’s.

Nothing about that thesis has changed over the past several months. At the same time, LEVI stock still trades in the low $20’s. Thus, while a full valuation has ultimately kept LEVI stock stuck in neutral for the past several months, it will likely keep it there for the next few months, too.

Levi Strauss Is a Pretty Basic Apparel Brand

In the big picture, Levi Strauss is not a big growth company. Instead, Levi Strauss is a regular, largely unspectacular apparel brand with low growth prospects over the next several years.

Levi Strauss makes and sells blue jeans. That’s a fine business. Consumers love blue jeans, and demand for blue jeans has endured through several generations. Levi Strauss is also really good at making and selling blue jeans. Thus, they are the top dog in a stable demand industry.

But, this industry isn’t really growing by all that much. The global apparel market is projected to grow at a 5% annualized pace over the next several years. The global jeans market is projected to grow at a 7% annualized pace. There aren’t any recognizable tailwinds on the horizon which could spark growth above and beyond that pedestrian rate. Meanwhile, there are headwinds on the horizon — namely, the continued rapid rise of athleisure styles — which could eat into jeans demand and drag that 7% growth rate lower.

All-in-all, then, Levi Strauss is a pretty regular apparel brand that is top dog in a mid-single-digit growth industry, at best. Gross margins have been on a pretty solid uptrend, but appear to be maxing out as they fell year-over-year last quarter. Meanwhile, the SG&A rate has been steadily rising, and will likely fail to benefit from operating leverage going forward. Levi Strauss will have to spend big on marketing to combat falling denim demand at the hands of the athleisure trend.

Putting all that together, Levi Strauss projects as a high single-digit-to-around-10% profit grower over the next several years. That’s roughly in-line with the apparel retail sector’s projected long term earnings growth rate, so by the numbers, Levi Strauss isn’t anything too special.

Levi Strauss Stock Is Fully Valued Considering Its Low Growth Reality

Considering its low growth reality as a high-single-digit-to-about-10% profit grower over the next several years, LEVI stock is fully valued in the lower $20’s.

Levi Strauss is projected to do about $1.06 in earnings this year. If EPS grows at a 10% annualized pace over the following several years, then EPS will come in around $1.90 by fiscal 2025. I actually think Levi Strauss can do a little bit better than that, and I’m modeling for around $2.10 in EPS by fiscal 2025.

Applying an apparel retail sector average 17-times forward multiple on that $2.10 EPS, we arrive at a fiscal 2024 price target for LEVI stock of nearly $36. Discounted back by 10% per year, that equates to a fundamentally supported fiscal 2019 price target of roughly $22.

That’s around where LEVI stock trades today. We are only about halfway through 2019. Thus, at this point in time, LEVI stock is in fairly valued to slightly overvalued territory.

Bottom Line on LEVI Stock

Levi Strauss had a big IPO, and the stock hasn’t gone anywhere since then. Why? Valuation. Levi Strauss is a low growth company trading at a full valuation. Unfortunately, nothing about that thesis has changed over the past several months, and LEVI stock trades exactly where it did a few months ago. Thus, going forward, a full valuation will continue to keep LEVI stock in neutral.

As of this writing, Luke Lango was long BYND.