Under Armour (NYSE:UA) reported promising second-quarter earnings earlier this week, and the stock has soared 18% in the past two days. Shareholders are doubtlessly happy, but at almost $65 per share, Fools should be wondering whether the stock is overpriced.

Based on earnings per share over the past 12 months, Under Armour stock is trading at a P/E ratio of 73. That's sky-high compared to other sportswear and apparel makers such as Timberland (NYSE:TBL), Hidden Gems rec Columbia (NASDAQ:COLM) at 18, Nike (NYSE:NKE) at 19, and even Oakley (NYSE:OO) at 37. Of course, Under Armour deserves a higher earnings multiple because of its growth potential, but is that too high a price? I did a back-of-the-envelope reality check to find out.

In the most recent earnings announcement, management reiterated long-term earnings growth estimates of 20%-25%. If earnings grow at the higher end of that estimate, the company would earn $2.12 during the fifth year. Let's assume that the current multiple contracts to 45; it's a reasonable P/E for a growth company, and it implies a PEG ratio of 1.8. The stock would then trade around $95 per share. Based on today's prices, that would be about an 8% compounded annual return over five years. Not a particularly attractive return, especially for a small-cap stock.

In a more optimistic scenario, assuming that Under Armour delivers 25% earnings growth and the earnings multiple stays above 65, investors would net a 16% annual return over five years. In that case, investors would double their money, and the company's market cap would be $6 billion -- still significantly less than Nike's current $29 billion.

Of course, that's a fairly simplistic analysis, and P/E ratios are notoriously difficult to predict. I'd urge Fools to be cautious with this stock. The company has serious long-term potential, but the market has priced in most of it already.

For more on the companies mentioned, check out:

Under Armour is a Motley Fool Rule Breakers selection. Fool co-founder David Gardner and his team are always keeping their eyes out for groundbreaking companies. See their latest picks with a free 30-day trial.

Fool contributor Brendan Mathews owns shares in Nike. The Fool's disclosure policy is built for speed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.