Under Armour (NYSE:UAA) (NYSE:UA) has taken investors on a volatile ride in recent years. Shares of the athletic apparel and footwear company have risen nearly 50% in the past 12 months but are still down more than 50% compared to three years ago.

Is this recent rally a sign that the company has finally turned the corner? And is the stock a compelling buy today? Let's find out.

A massive market opportunity

Despite years of rapid expansion, Under Armour has long runways for growth still ahead. Within the $280 billion athletic apparel and footwear market, the company is targeting what it refers to as "focused performers." These are consumers who care deeply about maximizing their athletic and fitness performance.

Under Armour estimates this market to be as large as $92 billion worldwide. This represents a sizable long-term growth opportunity for a business that generated $5.2 billion in revenue over the past year.

Check out the latest Under Armour earnings call transcript.

A very fit and muscular man jumping rope.

Under Armour is refocusing its brand to better serve athletes -- and those who aspire to become them. Image source: Getty Images.

Refocusing on its core customer

Under Armour believes that its brand resonates well with hardcore fitness enthusiasts. To strengthen this connection, it's repositioning itself as a "human performance company." After attempting to expand into the athleisure segment with only moderate success, Under Armour is reducing its product lineup and strengthening its focus on items that it believes give its customers a competitive edge. 

Adapting to shifting retail trends

Additionally, Under Armour is reducing its reliance on wholesale distribution partners and expanding its direct-to-consumer sales channels, such as its e-commerce websites. This is partly out of necessity, as the recent bankruptcies of sports-apparel retailers such as Sports Authority have taken a toll on Under Armour's results.

However, it also gives Under Armour a more direct connection with its customers, which can help it better control its brand image. It should also give the company more data that it can use to better target its promotions, thereby boosting the return on its advertising investments.

Intriguing international expansion prospects

Looking ahead, much of Under Armour's growth will likely come in international markets. The rapid growth of the middle class and a corresponding increase in purchasing power for consumers in massive emerging markets such as China are fueling demand for higher-quality apparel. In turn, Under Armour expects to grow its international revenue by as much as 19% annually over the next half-decade. 

Challenges remain

Still, while its international expansion prospects look intriguing, Under Armour's growth remains sluggish in its core North American market. The company's traditional retail partners are struggling as sales migrate to online channels.

Although this is benefiting Under Armour's e-commerce business, it's hurting its brick-and-mortar sales, which comprise a larger percentage of its business. In turn, Under Armour expects to deliver only low-single-digit sales growth in North America over the next five years. 

A less-than-ideal price

Despite these challenges, Under Armour's shares trade at a premium price. The stock is currently changing hands at more than 60 times Wall Street's earnings estimates for 2019. That's a bit rich -- even for a company that's projected to grow its profits by 40% annually over the next five years -- particularly since Under Armour has a history of issuing overly optimistic financial targets.

To account for this, investors wishing to profit from Under Armour's growth may be better served by an option strategy.

An alternative, options-based approach

Rather than buy the stock today -- or alternatively, waiting and hoping to get the opportunity to buy shares at a more attractive valuation -- investors may want to consider selling put options. With this option strategy, you'll be paid a premium (cash received upfront) to enter a contract to buy 100 shares of Under Armour at a specified time and price.

For example, the UAA January 2020 $15 puts are currently trading for about $1.08 per share. If Under Armour's Class A shares (ticker UAA) are trading at or above $15 on the option contract's Jan. 17, 2020 expiration date, the puts will expire worthless. And the $108 you'll receive in premium ($1.08 per share times 100 shares) will amount to a greater than 7% gain on the $1,500 you place at risk ($15 per share times 100 shares).

If Under Armour's Class A shares are trading below $15 at expiration, you'll be obligated to purchase 100 shares at an adjusted price of around $13.92 per share ($15 minus the $1.08 per share you received in premium), or about 33% lower than Under Armour's $20.65 price today. It's also important to note that you'll be buying the stock in January 2020, after it will have time to grow its earnings in the coming year. So in effect, you'll be buying shares at a significantly better valuation than is possible by simply buying the stock today.

Moreover, between the time you sell the puts and the expiration date, you'll have the option of buying back the puts or rolling them to other strike prices and/or expiration dates. While Under Armour may not be a compelling buy at current prices, this option-based approach gives you multiple ways to earn a profit in the year ahead.

Finally, the reason I chose the $15 strike price in this example is because at that level, Under Armour would be trading at around 45 times earnings, which would place its PEG ratio closer to 1 -- a level I find attractive for high-quality growth companies. So importantly, I'd be happy to buy shares at that price.

If you would as well, perhaps this option strategy is something for you to consider.