Under Armour (NASDAQ:UARM) not only blew away market estimates last week -- earning $0.18 a share when analysts were expecting only $0.07 -- but also raised its guidance. The new high-end targets for 2006 are $390 million in net revenue, up 62% from 2005, and $32 million in net income, up 39%. Shares went up to $37, and investors are wondering if Under Armour is still an attractive stock despite its lofty trailing P/E of 75.

With its innovative moisture-control products, Under Armour is well-positioned to become a major player in the $12 billion market for active apparel. However, it has earned only $22 million in net income in the last 12 months, and its $1.68 billion enterprise value is based primarily on expectations of future growth. So investors need to ask, how much will Under Amour grow? Management has promised eye-popping short-term growth of 57% to 62% for this year, and Wall Street analysts are forecasting 25% to 30% growth over the next three to five years. However, Fools know better than to simply trust management or Wall Street.

A much better way to understand Under Armour's potential is to use historical perspective: Look at similar companies when they were comparable in size to Under Armour. For instance, many supporters claim that Under Armour is the next Nike (NYSE:NKE). In many ways, Under Armour has followed a similar path. Both companies were inspired by college athletic programs. Both companies are known for innovative products. Both companies have great brands, and optimists might argue that Under Armour will continue to follow in Nike's footsteps. Nike went public in 1980 with $270 million in annual revenue. For the next five years, Nike averaged 29% annual revenue growth. Under Armour went public last year, and it has $310 million in revenue over the last 12 months.

So five years of 30% annual growth for Under Armour is a fairly reasonable expectation, especially considering that Nike isn't the only example of a branded apparel company growing in that range. Reebok averaged 48% annual revenue growth from 1985 to 1990, Tommy Hilfiger (NYSE:TOM) averaged 44% annual revenue growth from 1995 to 2000, and Quiksilver (NYSE:ZQK) averaged 25% growth from 1998 to 2003.

The problem is that the growth rate is already priced into Under Armour's stock. With a P/E ratio of 75, Under Armour needs to average 30%-plus growth just to meet investor expectations. Assuming that it grows its EPS by 30% for five years and the P/E contracts to 30, the stock would go from $37 to $58. Over five years, that is only a 9% annual return for investors, which is fairly poor for a small-cap growth stock. Investors buying Under Armour at recent prices need to believe that the company will grow at a rate higher than 30% for the next five years.

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Fool contributor Brendan Mathews welcomes your feedback at bmathews03@gmail.com. He owns shares of Nike. The Fool has a disclosure policy.