A company that becomes very successful usually at some point falls victim to its own success. Such is currently the case with athletic apparel, footwear, and accessories manufacturer Under Armour (NYSE:UAA).

By all accounts, the company is firing on all cylinders: growing at robust rates, beating analysts' estimates, and constantly raising guidance. However, as the steep drop in its share price indicates, investors and analysts alike simply expect too much from Under Armour now.

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Source: Under Armour. 

Earnings blowout
When the fantastic combination of a top- and bottom-line beat and raised guidance is not enough to lift shares, then it is usually a sign that sentiment is moving in the wrong direction. Under Armour's latest results were excellent. On a year-over-year basis, the company grew net revenue 36% to $642 million and diluted earnings per share 71% to $0.06 in the first quarter. 

Growth was driven in large part by Under Armour's signature apparel segment, which increased sales 33% to $459 million. The company's footwear segment grew even better, increasing sales 41% to $114 million. Finally, the accessories segment, which generated revenue of $52 million, grew the fastest at 43%.

Founder and CEO Kevin Plank explained:

We are off to a great start in 2014 driven by broad-based strength across our Apparel, Footwear, and International growth drivers. Our formula for driving newness and innovation in Apparel continues to resonate with consumers and helped deliver over 30% growth for our largest product category. That same model is contributing to success in Footwear, where we accelerated growth in running and brought award-winning product to the marketplace with the SpeedForm Apollo.

In the earnings release, management also updated the company's guidance for fiscal 2014. The company is now projected to grow revenue 24%-25% to $2.88 billion-$2.91 billion and operating income 25%-26% to $331 million-$334 million. Prior guidance from Under Armour management called for revenue growth of 22%-23% and operating income growth of 23%-24% in 2014. So, the company's new forecast represents a significant improvement.

When compared to both larger and smaller competitors like Nike (NYSE:NKE) and lululemon athletica (NASDAQ:LULU), Under Armour's growth is even more impressive. 

Nike is preparing for a large windfall from its numerous product introductions designed to capitalize on 2014's FIFA World Cup in Brazil. It is set to grow revenue and EPS 8.5% and 13.9%, respectively, for the year ended in May 2015, according to analysts at Yahoo! Finance.

Lululemon has only recently started to recover from a disastrous 2013 by reorganizing and diversifying the focus of its yoga-inspired apparel and accessories business. It is expected to grow revenue 13% and to experience an EPS decline of 1% in the year ended in January 2015, according to analysts at Yahoo! Finance.

Not enough?
However, the difficulty for Under Armour comes in the form of its stellar first-quarter success. Top-line growth of 36% is a very tough growth rate to maintain all year. This is precisely why the company's projections for revenue growth in the range of 24%-25%, although highly impressive, can also be seen as slightly disappointing.

It means that the incredible sales momentum Under Armour is currently experiencing won't last all year and will in fact slow down quite a bit. Granted, the growth is still much better than that of Nike and Lululemon, but so is Under Armour's valuation.

Even after Under Armour's 20% correction in share price, the company still sports an expensive forward P/E ratio of 40.5. Nike's forward P/E of 21.6 and Lululemon's forward P/E of 19.4 are significantly cheaper.

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Source: Under Armour.

Bottom line
Under Armour's recent stellar performance is what makes it the best and most aggressive investment in the athletic-apparel space. However, the company's success also highlights the major risk facing investors at the moment: The company is already expected to wildly succeed and Under Armour's valuation reflects this.

Philip Saglimbeni owns shares of Under Armour. The Motley Fool recommends lululemon athletica, Nike, and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.