Under Armour (UAA 1.04%) is delivering explosive financial performance for investors, and everything indicates that the business will keep firing on all cylinders over the years ahead. However, shares of the high-quality sports-apparel retailer are priced for demanding expectations, and this is always an important risk to keep in mind. Is now the right time to buy Under Armour, or is the stock just too expensive at current levels?

Under Armour is on fire
Under Armour announced a big 31% sales increase in the fourth quarter of 2015, reaching $1.17 billion during the period. Even more impressive, sales on a currency-neutral basis grew 33% year over year. This kind of growth is downright spectacular, and Under Armour has managed to increase sales at more than 20% annually over the past 25 consecutive quarters, a level of consistency that's quite extraordinary in the industry.

The company is investing big sums of money for growth, and doing so is hurting profit margins in the short term. However, earnings are still growing rapidly. Both operating income and net income jumped by 21% year over year last quarter. 

Importantly, Under Armour is strongly positioned for growth in key areas such as footwear and international markets. Sales in the footwear division grew 95% last quarter, reaching $86 million. The category represents nearly 17% of total revenue for Under Armour nowadays. By comparison, market leader Nike (NKE 0.45%) makes almost 60% of sales from footwear.

International sales grew by a staggering 70% year over year in U.S. dollars and by an even bigger 85% on a constant currency basis during the fourth quarter of 2015. Two years ago, Under Armour was making just 6% of sales from international markets. That number now amounts to 11% of revenue, and management believes international markets will produce nearly 18% of revenue by 2018. Nike generates more than 50% of revenues overseas, so Under Armour still has a lot of room for global growth in the coming years. 

The price of growth
Under Armour stock is not cheap by any means. The company carries a forward price-to-earnings ratio near 48, a substantial premium versus Nike and its forward price-to-earnings ratio around 24. Similarly, Under Armour trades at a price-to-sales ratio of 4.4, considerably higher than Nike, which trades at a P/S in the area of 3.3.  

Under Armour is priced at double the forward price-to-earnings ratio of Nike, and the company trades at a premium of more than 30% in terms of sales. However, it's important to keep in mind that Under Armour still offers a lot of room for expansion. Under Armour produced $3.96 billion in sales during 2015, while Nike is expected to bring in $32.75 billion during the year ending in May 2016. Importantly, Nike is still growing at a healthy rate, as the company registered a 12% increase in constant currency sales last quarter, while worldwide future orders rose 20% excluding currency hedges.

Under Armour is producing impressive financial performance on the back of product quality, relentless innovation, and growing brand recognition around the globe. The company operates in a compelling industry, and even industry giant Nike keeps finding plenty of growth opportunities it spite of its massive size.

When looking at total market capitalization, Under Armour is worth nearly $17.4 billion, versus $102.5 billion for Nike. Sure, Under Armour looks expensive in terms of current sales and earnings, but those metrics are moving in the right direction at an amazing speed, and Under Armour is still worth just 17% the size of Nike in terms of market value. 

Under Armour is an exceptional company, and a great business to buy for the long term. You don't need to go all in at current prices, though. You can buy a small starting position and continue adding over time, especially if price volatility provides a chance to buy Under Armour at discounted prices in the future.