Under Armour Inc. (NYSE:UA) (NYSE:UAA) stock has taken a beating in recent months -- the share price of both classes of stock are down more than 35% from where they opened the year.  Second-quarter revenue growth of just 9%, along with the announcement of a restructuring plan, left even optimistic investors feeling bearish about the stock. But before ditching Under Armour, it's worth taking a holistic look at the company through a SWOT analysis that looks at strengths, weaknesses, opportunities, and threats. Let's begin with Under Armour's strong points. 

Strengths

Over the past few years, Under Armour has wowed investors with eye-popping growth. The company's revenues more than doubled, going from $2.3 million to $4.8 million in just three years. Under Armour now states that it is the world's third largest athletic brand,  which means the company has more than just bragging rights -- it has brand recognition. At this point, Under Armour is a household name, not a start-up known only to early adopters.

Additionally, Under Armour is now known for a variety of products. When the company first started, it introduced a HeatGear T-shirt that wicked moisture from the body using synthetic fibers, and a ColdGear fabric that was designed to keep athletes warm and dry.  Though some people still may associate Under Armour with these types of products, the company now offers footwear and accessories in addition to apparel.

In 2016, Under Armour's net revenues came from apparel (67%), footwear (21%), accessories (8%), licensing (2%), and connected fitness (2%).

These newer product categories hold strong potential for the company. Accessories revenues grew by 22% in the second quarter of 2017, and management continues to believe in footwear. CEO Kevin A. Plank said in the second-quarter conference call that "footwear remains, frankly, our largest opportunity."

Overall, Under Armour is good at recognizing opportunities at the category level. Just because Under Armour started as an apparel company does not mean it will limit itself to being just an apparel company. Instead, management is willing to chase growth by taking chances on new types of products.

Two Under Armour employees review a document.

Image source: Under Armour.

Weaknesses

Rapid growth, though useful when courting investors, comes with its own set of headaches, some of which Under Armour currently is experiencing. In its second-quarter conference call, Under Armour unveiled a restructuring plan that is estimated to cost the company $110 million to $130 million. Ouch. Some $70 million of those costs are expected to be cash-related -- for items including facility and lease terminations and employee severance costs -- which will reduce the company's liquidity and its ability to make capital expenditures that could fuel, or at least support, future growth.

Plank laid out the restructuring plan for investors, talking about "streamlining operations" and "building an integrated global model." He also spoke of savings within selling, general, and administrative expenses and an "elevated focus on return on investment and the cost of capital."

We'll have to wait and see how this restructuring plays out and the plan in itself isn't a weakness, but it points out what could be a weakness at the company: a growth-focused mindset in a market that requires more.

The need for restructuring suggests that Under Armour's culture prioritizes rapid revenue increases over smart and sustainable long-term growth. After all, had the company expanded in a slower, more disciplined manner, it may have been able to build its business in a way that would support its long-term goals. Instead, Under Armour is now having to spend a huge chunk of change ripping up the floorboards of its business model. Prudent shareholders may be wondering: if company has had to restructure once, how long will it be before it has to restructure again?

Opportunities

During the first quarter of 2017, Under Armour began selling its merchandise in Kohl's. According to Kohl's CEO Kevin Mansell, the partnership has been a success, with Under Armour delivering "a very strong performance [that] beat the sales plan across almost all categories." 

Today, many mid- and high- tier department stores including Macy's, Dillard's, and Neiman Marcus carry Under Armour merchandise. Yet there are still some retailers, such as J.C. Penney, that do not yet sell the brand. Target currently carries Under Armour electronics, but could begin offering apparel in the future. In essence, Under Armour could continue growing its revenues by putting its products on even more American retailers' shelves.

Additionally, international markets still hold strong potential for Under Armour. In the second quarter of 2017, Under Armour's international sales grew 57% from the prior-year quarter, but still represented just 22% of the company's total revenues. Investors can feel confident that Under Armour still has plenty of room to grow outside the United States.

Threats

One downside of Under Armour selling a wide variety of products is that its brand image could get diluted. In the second quarter conference call, Plank said that,"UA is special because we've represented performance." Indeed, performance-oriented apparel is the foundation of the brand, but today Under Armour isn't just about ColdGear fabric and HeatGear T-shirts. The Under Armour brand also includes stylish sports bras, wireless headphones, socks, backpacks, and duffle bags. And while all of these products increase Under Armour's ability to generate revenue, over time they could diminish the company's performance-oriented image and competitive advantage.

And the results of the SWOT analysis are...

Just because Under Armour is restructuring, diversifying its product offerings, and seeing smaller year-over-year revenue increases doesn't mean investors should jump ship. It's worth considering the company's strong history of expansion and its potential for future growth, especially in international markets. Though it seems doubtful the company will continue doubling its revenues every few years, management is putting its efforts into the diverse markets and categories that have potential to fuel the brand in its pursuit of global market share. Investors can, and should, take heart. 

Lennay Chapman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool has a disclosure policy.