An explosive analyst report hit Force Protection's ( FRPT - Get Report) stock Tuesday.

Veering sharply away from the dominant bullish crowd, Stephens analyst Tim Quillin this week began urging investors to sell Force Protection's stock, saying he sees a likely plunge in earnings. Quillin sees Force Protection losing market share and producing thin margins in a business that will soon start to shrink.

Currently, Force Protection ranks as a leading supplier of Mine-Resistant Ambush-Protected vehicles for the global war on terror. But the company has lost some ground to larger players in recent quarters and, Quillin feels, could wind up with less than 25% of the MRAP market before demand for its vehicles wanes -- as the Iraq war winds down -- in a couple of years.

"We would sell/short shares of Force Protection, as we believe it is priced for a near best-case scenario," writes Quillin, whose firm hopes to secure investment banking business from the company in the future. Thus, "we are initiating coverage with an underweight/volatile rating and a 12-month price target of $14" a share.

The stock, while down 3% to $22 following Quillin's report, has not seen a price that low so far this year. Indeed, it fetched more than twice that much -- peaking above $30 a share -- just four months ago.

But Quillin, for one, feels that the joyride could soon come to an end. Notably, he sees Force Protection -- a company expected to generate profits as high as $1.75 a share next year -- posting "sustainable" earnings of just 50 cents to 60 cents a share a few years down the road.

Actually, "our 2008 projections are well above the Street's consensus," Quillin says. But "we believe our estimates are closer to a best-case than a worst-case scenario."

Quillin's firm rarely issues such bearish reports. Indeed, the firm has sell recommendations on just two -- or less than 1% -- of the companies it covers.

Importantly, Quillin sees Force Protection losing further ground even during the MRAP boom. He lists three larger players -- BAE, Navistar ( NAVZ and Oshkosh ( OSK - Get Report) -- as especially "formidable competitors."

Meanwhile Quillin feels that Force Protection will generate only modest profit margins on the business that it does manage to land. Looking forward to next year, Quillin sees profit margins of 10% -- down slightly from last quarter -- as a "reasonable target" for the company.

After that, Quillin sees an even rougher road ahead. Notably, he feels that the entire MRAP program will begin winding down in 2009 -- if not earlier -- and leave Force Protection facing weak demand for its products.

"We view MRAP as an Iraq-specific vehicle and believe production will slow when troop levels decline," Quillin warns. Meanwhile, "we believe FRPT's current valuation already assumes that its Cheetah vehicle will not only capture orders under the MRAP program but also win a substantial portion of the Joint Light Tactical Vehicle program, the military's eventual Humvee replacement.

"While we believe Cheetah production could ramp up in 2008 for foreign military sales, we doubt that it will win orders under the MRAP program and believe it could be shut out of the longer-term JLTV opportunity" altogether.

Notably, Quillin feels that only huge Cheetah sales -- or a takeout of the entire company -- can protect Force Protection's stock. He views both possibilities as unlikely and is, therefore, steering investors clear of a possible minefield.

"While the valuation looks fairly cheap on a relative basis, we do not believe the stock price adequately reflects the very strong possibility of a significant earnings decline in 2009 and 2010," he concluded. A "great truck does not equal a great stock."