Nike
NKE
$39.06
-1.36%
Nike, Inc. is the world's largest athletic footwear and apparel brand, designing, marketing, and selling products across categories such as running, basketball, and football (soccer), with footwear generating roughly two-thirds of sales. Its portfolio includes the Nike, Jordan, NikeSkims, and Converse brands, and it distributes through company-owned stores, franchised locations, and third-party retailers, alongside a robust e-commerce platform. The current investor narrative centers on a severe downturn: the stock has fallen to 12-year lows amid declining revenue, tariff headwinds, and uncertainty about the company's turnaround strategy, with debates over whether the deep value is a buying opportunity or a value trap. Recent news highlights the expiration of a 10% global tariff and its replacement with Section 301 tariffs, which could impact margins, while analysts remain cautious about the pace of recovery in key markets like Greater China.…
NKE
Nike
$39.06
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Investment Opinion: Should I buy NKE Today?
Rating: Hold. Nike is a high-risk value proposition with a consensus 'hold' rating and an average target price of $50.52, implying 27.6% upside. The thesis is that the stock is cheap on a forward basis, but the lack of revenue growth and uncertain turnaround make it a speculative buy rather than a core holding.
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NKE 12-Month Price Forecast
The AI assessment is neutral with medium confidence. Nike's valuation is not demanding on a forward basis, but the negative revenue growth and uncertain turnaround limit upside. The improving gross margin is a positive signal, but it may be temporary due to tariff refunds. The stock is likely to trade in a range until there is clear evidence of revenue stabilization. An upgrade to bullish would require two consecutive quarters of positive revenue growth and sustained margin improvement. A downgrade to bearish would occur if revenue decline accelerates or if the dividend is cut.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nike's 12-month outlook, with a consensus price target around $50.52 and implied upside of +29.3% versus the current price.
Average Target
$50.52
0 analysts
Implied Upside
+29.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$23 - $94
Analyst target range
Nike is covered by 34 analysts, with a consensus recommendation of 'hold' and a mean rating of 2.56 (where 1 is strong buy and 5 is sell). The average target price is $50.52, implying an upside of 27.6% from the current price of $39.60. The distribution includes 10 analysts with recent ratings: 2 Buy, 3 Outperform, 4 Neutral/Hold, and 1 Underperform, indicating a cautious but not overly bearish sentiment. The low target of $23.00 suggests a scenario of continued deterioration, while the high target of $94.00 implies a full recovery to previous highs, reflecting a wide range of outcomes. The wide spread between low and high targets (from $23 to $94) indicates high uncertainty about Nike's turnaround prospects, with the low target pricing in prolonged weakness and the high target assuming a successful recovery. Recent institutional ratings from July 2026 show no changes, with firms like BofA, Wells Fargo, and UBS maintaining neutral stances, while Jefferies and Bernstein remain more positive. This mixed sentiment aligns with the 'hold' consensus, suggesting that analysts are waiting for clearer signs of a turnaround before becoming more bullish.
Bulls vs Bears: NKE Investment Factors
Nike presents a classic value trap versus deep value debate. The bull case rests on a compelling valuation (forward PE 17.3x, 27.6% upside to average target), improving gross margins (49.2% in Q4), and a strong balance sheet. The bear case is anchored in persistent revenue declines, negative growth-adjusted valuation (PEG -6.78), and cautious analyst sentiment. Currently, the bearish evidence is stronger given the lack of a confirmed revenue stabilization, but the stock's proximity to its 52-week low and potential margin recovery create a high-risk, high-reward setup. The single most important tension is whether Nike can return to revenue growth; if it does, the stock could re-rate significantly, but if not, it may continue to slide toward the low target of $23.
Bullish
- Deep Value with 27.6% Upside to Average Target: At $39.60, Nike trades 27.6% below the average analyst target of $50.52, offering substantial upside if the consensus view is correct. The stock is near its 52-week low of $38.17, suggesting limited downside from current levels.
- Forward PE of 17.3x Implies Earnings Recovery: The forward PE of 17.28x is significantly lower than the trailing PE of 21.87x, indicating the market expects earnings to grow ~21% over the next year. This suggests analysts anticipate a margin recovery as tariff headwinds fade and cost initiatives take effect.
- Gross Margin Expansion to 49.2% in Q4 FY2026: Gross margin improved to 49.15% in Q4 FY2026, up from 40.27% in Q4 FY2025, driven by lower input costs and tariff refunds. This 8.9 percentage point expansion demonstrates the company's ability to protect profitability despite revenue declines.
- Strong Balance Sheet with Low Debt-to-Equity: Nike's debt-to-equity ratio of 0.74 and current ratio of 1.96 indicate a solid financial position, providing flexibility to navigate the downturn. The company generated $2.18 billion in free cash flow over the trailing twelve months, supporting dividends and buybacks.
Bearish
- Revenue Declining with No Clear Bottom: Revenue fell 1.13% YoY in Q4 FY2026 to $10.97 billion, and the quarterly trend shows deceleration from $12.43 billion in Q2 to $10.97 billion in Q4. This persistent decline suggests demand weakness and potential market share loss to competitors like Adidas and On.
- Stock Down 49% in One Year, Near 12-Year Low: Nike's stock has fallen 49.18% over the past year and is trading just 3.7% above its 52-week low of $38.17. The 1-year relative strength of -67.74% versus the S&P 500 indicates severe underperformance, reflecting deep investor pessimism.
- Negative PEG Ratio Signals Poor Growth-Adjusted Value: The PEG ratio of -6.78 is negative due to expected earnings decline, indicating the stock is not cheap on a growth-adjusted basis. This suggests the market is pricing in a prolonged earnings slump, not just a temporary dip.
- Analyst Consensus is 'Hold' with Cautious Sentiment: With a mean rating of 2.56 (between hold and outperform) and only 2 Buy ratings among 10 recent analysts, the Street is not convinced of a quick turnaround. The wide target range of $23 to $94 highlights extreme uncertainty about Nike's recovery path.
NKE Technical Analysis
Nike's stock is in a pronounced downtrend, with a 1-year price change of -49.18% and a 6-month change of -36.31%, reflecting persistent selling pressure. The current price of $39.60 sits near the 52-week low of $38.17, representing only 3.7% above the low and 50% below the 52-week high of $79.13. This positioning near the bottom of the range suggests the market is pricing in significant pessimism, but also raises the possibility of a value opportunity if fundamentals stabilize. The stock's beta of 1.118 indicates slightly higher volatility than the market, amplifying both downside and upside moves.
Beta
1.12
1.12x market volatility
Max Drawdown
-51.5%
Largest decline past year
52-Week Range
$38-$77
Price range past year
Annual Return
-49.5%
Cumulative gain past year
| Period | NKE Return | S&P 500 |
|---|---|---|
| 1m | -6.4% | +2.7% |
| 3m | -10.7% | +1.0% |
| 6m | -33.4% | +12.0% |
| 1y | -49.5% | +18.9% |
| ytd | -38.3% | +12.5% |
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NKE Fundamental Analysis
Revenue has been declining, with the most recent quarter (Q4 FY2026, ending May 31, 2026) showing revenue of $10.97 billion, a 1.13% year-over-year decrease. Over the past four quarters, revenue has been inconsistent: Q1 FY2026 revenue was $11.72 billion, Q2 was $12.43 billion, Q3 was $11.28 billion, and Q4 was $10.97 billion, indicating a decelerating trend. The revenue segments show Footwear as the largest at $15.04 billion, followed by Apparel at $7.57 billion, but the overall decline suggests weakness across key categories. This negative growth trajectory is a major concern for the investment case, as it signals potential market share loss and demand softness.
Quarterly Revenue
$11.0B
2026-05
Revenue YoY Growth
-1.1%
YoY Comparison
Gross Margin
49.1%
Latest Quarter
Free Cash Flow
$2.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NKE Overvalued?
Given that Nike's net income is positive (net income of $1.07 billion in the latest quarter), the PE ratio is the primary valuation metric. The trailing PE is 21.87x, while the forward PE is 17.28x, implying that the market expects earnings to grow by approximately 21% over the next year. This gap suggests optimism about a recovery, but it may be overly optimistic given the current revenue decline. The PEG ratio is -6.78, which is negative due to negative earnings growth expectations, indicating that the stock is not cheap on a growth-adjusted basis. The PS ratio of 1.47x is relatively low compared to historical levels, but this is justified by the weak growth outlook.
PE
21.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 16x~50x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Nike's revenue decline of 1.13% YoY in Q4 FY2026 and a decelerating quarterly trend (from $12.43B in Q2 to $10.97B in Q4) indicate weakening demand, which could persist if the brand fails to innovate or compete effectively. The company's net margin of 6.7% is thin, and operating margin of 8.2% leaves little room for error; any further tariff or cost pressure could compress profitability. While debt-to-equity is manageable at 0.74, the high payout ratio of 77.4% suggests limited retained earnings for reinvestment, potentially constraining growth initiatives. Free cash flow of $2.18B is positive but declining, which could pressure the dividend if the downturn deepens.