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NEW YORK (CNN/Money) - It used to be that only girls who lived in New York City could have breakfast at Tiffany's.

But the company known for glittery jewelry in its signature blue box has grown into a global powerhouse with more than 150 stores, 7,000 employees and $2.2 billion in sales last year.

International sales have soared as Tiffany's opened outlets in Europe, Asia and Central and South America. Tiffany & Co. has also introduced products at lower prices, making them more accessible to a range of consumers.

And it has benefited from a trend that's given a boost to all luxury goods makers: the rise of the "mass affluent" consumer: free spenders who are more wealthy than the average middle-class customer but are not super rich.

So it's no surprise that shares of Tiffany (Research) have gained more than 10 percent during the past year. But that only sounds good until you look at what the stocks of other luxury goods companies have done.

Tiffany has underperformed other luxury marketers, such as Swiss firm Richemont (Research), which owns Cartier, and retailer Nordstrom (Research), during this recent boom. Some analysts worry about soft sales in Japan and that the Tiffany brand may be overexposed.

The company is due to report results next week and analysts are predicting a slight dip in earnings and revenue growth of 9 percent from a year ago, to $520 million. So is Tiffany's stock a diamond in the rough?

As Tiffany adds more stores and boosts its less expensive offerings, analysts say the company treads a path that several other luxury retailers have tried with rocky results: a move slightly down market.

So far, the strategy has worked nicely for sales, particularly in the U.S. Tiffany's domestic sales jumped 14 percent in its first quarter. Analysts say that lower-priced goods like key rings, pens, paperweights and porcelain should also lift profits, since margins are higher on these types of products.

But some are concerned that the ubiquity of Tiffany's goods will dilute the company's sterling reputation with its more affluent customers.

"Exclusivity and uniqueness are most critical to wealthy consumers," said Milton Pedraza, president of the Luxury Institute, a research firm. "Having too many stores can take away from exclusivity."

That could be a big problem for a company with a 168-year old brand name best known for expensive diamonds and jewelry.

"There's a tremendous profit margin on the tchotchkes they're selling and I understand the appeal of that," said Howard Davidowitz, chairman of his own retail research firm. "But the most valuable thing that Tiffany has is their brand name. You can't be everything to everybody."

The other question facing the company is how successful it can be oversease. Japan, which accounted for 22 percent of the company's sales last year, has been a problem.

Japanese expansion has been a drag on the company's sales and profits lately, as brand-fickle consumers objected to Tiffany's lower-end offerings, said Davidowitz.

Still, the company has plans to open two new outlets in Osaka and Yokohama in September and is looking at other international markets."We plan to selectively open stores each year in important markets in Asia, Europe and Latin America," said Tiffany spokesman Mark Aaron.

Analysts hope the company will learn from its mistakes in Japan and focus more on the wealthiest consumers in emerging markets, even if that's just a fraction of the potential customer base.

"Not only are the number of wealthy consumers growing, but in China and India it's going to grow dramatically in next century," said the Luxury Institute's Pedraza. "Tiffany needn't focus on volume."

Online sales afford another opportunity. Direct marketing sales -- including Internet, business-to-business and catalog purchases -- represented just 9 percent of total revenue last year. Analysts emphasized that Tiffany has much to gain by increasing its online presence.

"Wealthier consumers are online more than most other segments," said Pedraza. "And online you're always looking to buy from a trusted name."

Despite some growth concerns, Tiffany remains the world's No. 1 jewelry company for a good reason.

Quality is top-notch. Most notably, engagement rings are standouts. And the company still has ample opportunity to grow in this important market. Engagement-related jewelry is only about 20 percent of sales, according to Aaron.

The company is also moving into other high-end areas that analysts are excited about. A new pearl collection will mark its entry into a niche area whose full potential is untapped. So if the company maintains a sharp focus on the astronomical growth prospects for the luxury market, shareholders could see some shiny returns.

As such, analysts still think the company should be able to consistently generate annual earnings increases of 12 percent, on average, during the next five years.

But even though the stock has underperformed other luxury companies, it still trades at a pretty rich multiple of 22.5 times earnings estimates for this year.

By way of comparison, lower-end jewelry firms Zale (Research) and Britain's Signet Group (Research), which owns the Kay chain of stores, trade for just 12 and 14 times this year's forecasts, respectively. And their earnings are expected to grow at about the same rate as Tiffany.

Sure, Tiffany and its blue boxes probably deserve to trade at some sort of premium to the more middle-market jewelry firms because of the company's superior brand name. But the stock price may just be too rich -- Tiffany's shares are one luxury item that investors should pass on.

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