Nike
NKE
$38.32
-0.91%
Nike, Inc. is the world's largest sports performance and lifestyle merchandiser, designing and selling athletic footwear (roughly two-thirds of sales), apparel (~30%), and equipment (~5%) across its Nike, Jordan, ACG, NikeSkims, and Converse brands through company-owned stores, franchise partners, and a global e-commerce footprint spanning more than 40 countries, while outsourcing nearly all production to contract manufacturers in over 30 countries. Its competitive identity rests on unmatched brand equity, athlete endorsement scale, and a vertically integrated marketing machine that has historically commanded premium pricing and shelf space across both performance and lifestyle categories. The current investor narrative has shifted decisively bearish: the stock is mired near 52-week lows as management guides to high-single-digit revenue declines, China weakness persists, and a multi-year turnaround under the 'Win Now' and 'Sport Offense' initiatives has yet to show inflection. Recent coverage frames the debate around whether Nike is a generational value opportunity or a value trap, with the fiscal 2027 outlook pitting cost-savings progress against continued revenue risk and questions mounting over dividend sustainability given a payout ratio near 77%.…
NKE
Nike
$38.32
Related headlines
Investment Opinion: Should I buy NKE Today?
Rating: Hold. Nike is a high-quality franchise trading at a modest multiple, but with revenue contracting 4.33% year-over-year, gross margin down roughly 640 basis points sequentially to 42.79%, and the analyst consensus target of $36.42 sitting 5.6% below the $38.59 spot price, there is no margin of safety to justify new capital until the fundamental bottom is visible. The core thesis is that brand equity, a 1.96 current ratio, 0.74 debt-to-equity, and $6.90 billion of cash protect the downside, but the 'Win Now' cost program is unlikely to offset revenue pressure before FY29-FY30 per Zacks, so the stock is a wait-and-see turnaround rather than a compelling entry.
Supporting evidence is mixed but tilts defensive: the trailing PE of 21.87x sits in the lower portion of its three-year 15.9x-108x band, and PS of 1.47x and EV/Sales of 1.31x are a fraction of the 5-15x range commanded in 2021-2024, yet the forward PE of 24.93x exceeding trailing signals consensus EPS of $3.00 implies earnings shrinkage, and the PEG of -6.78 confirms negative growth. Profitability remains positive (net margin 6.70%, ROE 20.91%, ROA 6.89%) but free cash flow turned negative at -$64 million versus +$1.50 billion in Q4 FY26, and the 77.4% payout ratio against $610 million of quarterly dividends leaves little room for error. Analyst sentiment reinforces caution: 24 Hold and 9 Sell ratings against 10 Buys, a mean rating of 2.93, and a $19-$60 target range spanning more than 3x.
The biggest risks that would invalidate even a Hold are a dividend cut (flagged as likely by The Motley Fool given the 77.4% payout and negative quarterly FCF), a retest of the $31.97 52-week low (roughly -17% from spot), and continued high-single-digit revenue declines into FY27 that would push the stock toward the $19.00 analyst low (-51%). This Hold would upgrade to Buy if gross margin stabilizes above 45% and revenue decline decelerates to low single digits with positive FCF, and would downgrade to Sell on a dividend cut or a decisive break below $31.97. On valuation, the stock is cheap versus its own history but not distressed on absolute multiples, so it is fairly valued to modestly undervalued for a franchise in cyclical trough — not a bargain until the inflection is proven.
Sign up to view all
NKE 12-Month Price Forecast
Nike is a premium franchise caught in a cyclical trough where the valuation is cheap versus its own history (PS 1.47x versus 15.27x in Q4 FY22) but not distressed on absolute multiples, and the forward PE inversion signals the market expects earnings to keep shrinking. The bear case holds stronger near-term evidence — revenue down 4.33%, gross margin compressed roughly 640 basis points sequentially, negative FCF, and a consensus target below spot — while the bull case rests on defensive attributes (current ratio 1.96, D/E 0.74, $6.90 billion cash, 3.53% yield) rather than an inflection. The 12.31% one-month bounce versus a -4.99% S&P 500 decline shows pessimism may have peaked near the $31.97 low, but the failure to hold $40 on November 6 suggests the rally is meeting supply. I would upgrade to bullish if gross margin stabilizes above 45% and revenue decline decelerates to low single digits with positive FCF, and downgrade to bearish on a dividend cut or a decisive break below $31.97. With a 55% base-case probability centered near the $36.42 consensus, risk/reward is roughly balanced but offers no compelling edge at current levels.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nike's 12-month outlook, with a consensus price target around $36.46 and implied upside of -4.8% versus the current price.
Average Target
$36.46
44 analysts
Implied Upside
-4.8%
vs. current price
Analyst Count
44
covering this stock
Price Range
$19 - $60
Analyst target range
Coverage is broad with 37 analysts, but sentiment is decidedly cautious: the distribution of 10 Buy, 24 Hold, and 9 Sell ratings yields a consensus recommendation of 'hold' with a mean rating of 2.93 (where 3.0 is a pure hold). The average target price of $36.42 sits below the current price of $38.59, implying roughly -5.6% downside to consensus — a rare configuration that signals analysts collectively view the recent bounce as overdone. The consensus leans neutral-to-bearish, and the fact that the average target is below spot suggests the one-month rally has run ahead of fundamental support.
The target range is exceptionally wide, from a low of $19.00 to a high of $60.00 — a spread of more than 3x — which signals very low conviction and high uncertainty about the turnaround's trajectory. The $60 high target implicitly assumes successful execution of the cost-savings program, margin recovery, and a return to growth that would justify multiple expansion back toward historical norms, while the $19 low target prices in continued revenue declines, further margin compression, and possibly a dividend cut or balance-sheet stress. Recent institutional actions skew negative: Truist Securities downgraded to Sell from Hold on November 5, 2026, Morgan Stanley maintains Underweight, and UBS and Citigroup remain Neutral, with only scattered Buy reiterations from Guggenheim, BTIG, and Barclays. The pattern of downgrades into weakness, combined with a consensus target below the current price, indicates that the analyst community sees the risk/reward as unfavorable until there is concrete evidence of a fundamental bottom.
Bulls vs Bears: NKE Investment Factors
The bear case currently holds stronger evidence: revenue is contracting 4.33% year-over-year with guidance for high-single-digit declines, gross margin compressed roughly 640 basis points sequentially, free cash flow turned negative, and the analyst consensus target of $36.42 sits below the $38.59 spot price. The bull case rests on brand equity, a healthy balance sheet (current ratio 1.96, D/E 0.74), a 3.53% dividend yield, and a 12.31% one-month counter-trend bounce, but these are defensive attributes rather than evidence of fundamental inflection. The single most important tension is whether the 'Win Now' cost-savings program can offset revenue declines before the dividend's 77.4% payout ratio forces a cut — Zacks notes savings may not offset revenue pressure until 2029-2030. If gross margin stabilizes above 42% and revenue decline decelerates to low single digits, the value-trap narrative flips; if high-single-digit declines persist into FY27, the $31.97 low is likely to be retested.
Bullish
- Iconic brand at trough multiples: At a PS of 1.47x and EV/Sales of 1.31x, Nike trades at a fraction of the 5-15x PS range it commanded through 2021-2024, with PS compressing from 15.27x in Q4 FY22. The market is pricing the franchise as if the brand premium has permanently eroded, leaving substantial optionality if revenue merely stabilizes.
- Balance sheet remains investment grade: Current ratio of 1.96, debt-to-equity of 0.74, and $6.90 billion in cash provide a meaningful buffer against the downturn. ROE of 20.91% and ROA of 6.89% confirm the underlying business still generates respectable returns on capital despite the cyclical trough.
- Short-term momentum inflecting: The stock is up 12.31% over the past month versus a -4.99% decline in the S&P 500, a relative strength reading of +17.30 off the October low near $33.87. This counter-trend bounce suggests pessimism may have peaked and that buyers are stepping in near the 52-week low of $31.97.
- Cost-savings program provides floor: The 'Win Now' and 'Sport Offense' initiatives target structural cost reductions, and SG&A of $3.91 billion against $11.21 billion in revenue leaves room for operating leverage if sales stabilize. Even modest margin recovery from the current 7.92% operating margin toward the 11.98% seen in Q4 FY26 would meaningfully lift EPS.
Bearish
- Revenue decline accelerating, not bottoming: Q1 FY27 revenue of $11.21 billion fell 4.33% year-over-year, and management guides to high-single-digit declines ahead. The multi-quarter trend from $12.43 billion in Q2 FY26 to $11.21 billion in Q1 FY27 shows no inflection, undermining any near-term turnaround thesis.
- Margins collapsing sequentially: Gross margin fell to 42.79% in Q1 FY27 from 49.15% in Q4 FY26, roughly 640 basis points of sequential compression, while net margin dropped to 6.35% from 9.74%. This points to heavy promotional discounting to clear inventory, a classic symptom of demand weakness in a discretionary category.
- Analyst consensus below spot price: The average target of $36.42 sits 5.6% below the current $38.59, with 24 Hold and 9 Sell ratings against only 10 Buys and a mean rating of 2.93. A consensus target below spot is a rare configuration signaling analysts view the recent bounce as overdone.
- Free cash flow turned negative: Free cash flow was -$64 million in the latest quarter versus +$1.50 billion in Q4 FY26, driven by a -$846 million working capital swing and operating cash flow of just $135 million against $199 million of capex. With a 77.4% payout ratio, the dividend is consuming earnings precisely when investment is needed.
NKE Technical Analysis
Nike is in a sustained, deeply entrenched downtrend, with the stock down 37.65% over the past year and 39.02% year-to-date, dramatically underperforming the S&P 500's +9.59% 1-year return for a relative strength gap of -47.24 percentage points. At $38.59, the stock sits just 18.9% above its 52-week low of $31.97 and a staggering 44.2% below its 52-week high of $69.14, placing it in the bottom quintile of its annual range — a positioning that reflects persistent distribution rather than a healthy pullback, and one that keeps the burden of proof squarely on the bulls. The maximum drawdown of -52.91% over the period underscores how severe the de-rating has been for a mega-cap consumer franchise.
Short-term momentum, however, has turned sharply positive and diverges from the longer-term trend: the stock is up 12.31% over the past month versus a -4.99% decline in the S&P 500, producing a relative strength reading of +17.30 — a notable counter-trend bounce off the October lows near $33.87. That said, the 3-month change of -7.46% and 6-month change of -12.57% confirm the rally is a rebound within a larger decline rather than a trend reversal, and the most recent session saw a -2.45% pullback on elevated volume of roughly 20.45 million shares, suggesting the bounce is meeting supply. With no RSI provided, the magnitude of the one-month move off oversold territory implies the stock has likely worked off extreme pessimism, but the failure to hold the $40 level on November 6 is a caution flag for momentum traders.
Key technical levels are well defined: support rests at the 52-week low of $31.97, with the October swing low around $33.87 as an intermediate floor, while resistance sits at the $40–$41 zone where the recent rally stalled and, more significantly, at the 52-week high of $69.14. A decisive break below $31.97 would signal a fresh leg of distribution and likely trigger further momentum selling, whereas reclaiming and holding above $41 would be the first constructive sign of a potential bottoming pattern. The beta of 1.031 indicates the stock moves roughly in line with the market on a volatility basis, but the -52.91% drawdown and 37-point 52-week range ($31.97 to $69.14) reveal substantial idiosyncratic risk — position sizing should account for the fact that this is a high-dispersion name where stock-specific catalysts, not market beta, drive returns.
Beta
1.03
1.03x market volatility
Max Drawdown
-51.4%
Largest decline past year
52-Week Range
$32-$69
Price range past year
Annual Return
-39.3%
Cumulative gain past year
| Period | NKE Return | S&P 500 |
|---|---|---|
| 1m | +8.4% | -2.4% |
| 3m | -7.1% | -2.3% |
| 6m | -8.5% | +2.8% |
| 1y | -39.3% | +11.3% |
| ytd | -39.4% | +11.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
NKE Fundamental Analysis
Nike's revenue trajectory is contracting: the most recent quarter (ended August 31, 2026) delivered $11.21 billion in revenue, down 4.33% year-over-year, and the multi-quarter trend shows persistent pressure — revenue fell from $12.43 billion in Q2 FY26 to $11.28 billion in Q3, $10.97 billion in Q4, and $11.21 billion in Q1 FY27, with the year-ago Q1 comparison at $11.72 billion confirming the decline. Segment data shows footwear at $7.18 billion and apparel at $4.01 billion driving the bulk of the top line, with other products at just $26 million, meaning the footwear franchise — Nike's profit engine — is bearing the brunt of the slowdown. Management's guidance for high-single-digit declines implies the contraction is not yet bottoming, which undermines the investment case for a near-term turnaround and explains the market's reluctance to pay for a recovery.
Profitability remains positive but is compressing meaningfully: Q1 FY27 net income was $712 million on a 6.35% net margin, down from $1.07 billion and a 9.74% net margin in the prior quarter, and well below the year-ago Q1 net income of $727 million. Gross margin came in at 42.79% in the latest quarter versus 49.15% in Q4 FY26 and 42.18% in the year-ago Q1, while the operating margin of 7.92% and EBITDA of $1.08 billion (9.64% EBITDA margin) reflect heavy selling and marketing spend of $1.25 billion and SG&A of $3.91 billion. The margin compression — gross margin down roughly 640 basis points sequentially — points to elevated promotional activity and discounting needed to clear inventory, a classic symptom of demand weakness in a discretionary category where Nike historically commanded premium pricing.
The balance sheet is a relative bright spot but cash generation is deteriorating: the current ratio of 1.96 and debt-to-equity of 0.74 are healthy for the sector, and ROE of 20.91% remains respectable, but free cash flow turned negative at -$64 million in the latest quarter versus +$1.50 billion in Q4 FY26, driven by a -$846 million working capital swing and operating cash flow of just $135 million against $199 million of capex. TTM free cash flow of $2.11 billion is being stretched by $610 million in quarterly dividends, and with a payout ratio of 77.4% and dividend yield of 3.53%, the dividend is consuming a large share of earnings — a sustainability concern flagged in recent coverage. The company retains $6.90 billion in cash, providing a buffer, but the combination of negative quarterly FCF and a high payout ratio means Nike's financial flexibility is narrowing precisely when it needs investment to fund the turnaround.
Quarterly Revenue
$11.2B
2026-08
Revenue YoY Growth
-4.3%
YoY Comparison
Gross Margin
42.8%
Latest Quarter
Free Cash Flow
$2.1B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is NKE Overvalued?
Because Nike remains solidly profitable (net income of $712 million in the latest quarter and positive TTM earnings), the PE ratio is the appropriate primary metric. The stock trades at a trailing PE of 21.87x and a forward PE of 24.93x — notably, the forward multiple is higher than the trailing, an unusual inversion that implies the market expects earnings to decline over the next twelve months, consistent with consensus EPS estimates of $3.00 against a contracting revenue base. The PEG ratio of -6.78 is not meaningful given negative growth, but the EV/EBITDA of 15.75x and EV/Sales of 1.31x provide cleaner cross-checks on a business in cyclical trough.
Against its own sector and historical norms, Nike's headline multiples look modest — a PS ratio of 1.47x and EV/Sales of 1.31x are far below the 5–15x PS range the stock commanded through 2021–2024 — but this apparent cheapness is largely a function of earnings that have already collapsed. The PB ratio of 4.58x and PCF ratio of 23.74x sit well above where a distressed consumer name would trade, suggesting the market is still ascribing meaningful brand value. Without a clean industry-average benchmark in the provided data, the most telling comparison is internal: the stock's own historical PE has ranged from roughly 15.9x to 108x over the past three years, and at 21.87x trailing it sits in the lower portion of that band — cheap relative to its own history, but not distressed on an absolute basis.
Historical context reinforces the de-rating story: Nike's PS ratio has compressed from 15.27x in Q4 FY22 to 1.47x today, and its PB ratio has fallen from 12.23x to 4.58x over the same span, a multi-year multiple compression that reflects both earnings deterioration and a permanent reset in how the market values the franchise. The forward PE of 24.93x exceeding the trailing 21.87x is the key valuation signal — it tells investors that consensus expects earnings to shrink, so the stock is not as cheap as the trailing number suggests. Until revenue stabilizes and margins inflect, the multiple is likely to remain range-bound, and any re-rating will require evidence that the turnaround is gaining traction rather than simply cost-cutting.
PE
21.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 16x~50x
vs. Industry Avg
21.8x
Industry PE ~21.8x*
EV/EBITDA
15.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are mounting on multiple fronts. Revenue fell 4.33% year-over-year to $11.21 billion in Q1 FY27 with management guiding to high-single-digit declines, while gross margin compressed to 42.79% from 49.15% sequentially and net margin halved to 6.35% from 9.74%. Free cash flow turned negative at -$64 million versus +$1.50 billion in Q4 FY26, and with a 77.4% payout ratio against $610 million in quarterly dividends, the payout is consuming an unsustainable share of earnings — The Motley Fool explicitly flags a dividend cut as likely. Concentration in footwear ($7.18 billion of the $11.21 billion quarter) means the profit engine is bearing the brunt of the slowdown, and China weakness persists with roughly 5,500 franchised stores exposed.
Market and competitive risks center on valuation compression and demand erosion. At a forward PE of 24.93x exceeding the trailing 21.87x, the market already prices earnings decline, yet the PB of 4.58x and PCF of 23.74x remain well above distressed-consumer levels, leaving room for further de-rating if the turnaround stalls. Beta of 1.031 offers little diversification, but the -52.91% max drawdown and 37-point 52-week range ($31.97 to $69.14) reveal that idiosyncratic risk, not market correlation, drives returns. Competitive pressure is intensifying: Lululemon's Americas sales slump is deepening per Zacks, and Truist downgraded Nike to Sell on November 5, 2026, while Morgan Stanley maintains Underweight — a pattern of downgrades into weakness that signals the Street sees unfavorable risk/reward.
The worst-case scenario is a self-reinforcing cycle: high-single-digit revenue declines persist into FY27, promotional activity keeps gross margin near 42%, negative free cash flow forces a dividend cut, and the resulting loss of income-investor support drives the stock toward the $31.97 52-week low — a decline of roughly 17% from the current $38.59. A more severe outcome aligning with the $19.00 analyst low target would imply a 51% loss, consistent with the -52.91% max drawdown already experienced over the past year. Given the consensus target of $36.42 already sits below spot, even the base case offers modest downside, and the wide $19-$60 target range (more than 3x spread) confirms that conviction is exceptionally low across the analyst community.
FAQ
The most severe risk is dividend sustainability: the 77.4% payout ratio against $610 million in quarterly dividends and -$64 million of quarterly free cash flow has led The Motley Fool to flag a cut as likely, and a cut would remove the 3.53% yield support underpinning the stock. Second is continued revenue deterioration — Q1 FY27 revenue fell 4.33% year-over-year to $11.21 billion with management guiding to high-single-digit declines, and Zacks notes 'Win Now' cost savings may not offset revenue pressure until 2029-2030. Third is margin compression from promotional discounting, with gross margin down roughly 640 basis points sequentially to 42.79% and net margin halved to 6.35% from 9.74%. Fourth is analyst and sentiment risk: Truist downgraded to Sell on November 5, 2026, Morgan Stanley maintains Underweight, and the $36.42 consensus target sits below spot, so further downgrades could pressure the shares toward the $31.97 low.
The 12-month forecast is weighted toward a range-bound base case with 55% probability and a $33.00-$38.00 target range, assuming revenue declines decelerate to mid-single digits, gross margin holds near 42-43%, and consensus EPS of $3.00 is met — keeping the stock near the $36.42 analyst average. The bear case carries 30% probability with a $19.00-$31.97 range, driven by persistent high-single-digit declines, a dividend cut, and a retest of the 52-week low. The bull case has just 15% probability with a $55.00-$60.00 range, requiring gross margin recovery above 45%, China stabilization, and cost savings flowing through to operating margin above 11.98%. The most likely outcome is the base case: modest downside from the $38.59 spot with the multiple range-bound until FY27 guidance shows a bottom.
NKE is cheap relative to its own history but not distressed on absolute multiples, making it fairly valued to modestly undervalued for a franchise in a cyclical trough. The trailing PE of 21.87x sits in the lower portion of its three-year 15.9x-108x band, and PS of 1.47x and EV/Sales of 1.31x are far below the 5-15x range commanded in 2021-2024. However, the forward PE of 24.93x exceeding the trailing 21.87x is an unusual inversion signaling consensus expects EPS to shrink toward $3.00, and the PEG of -6.78 reflects negative growth. The PB of 4.58x and PCF of 23.74x remain well above where a truly distressed consumer name would trade, implying the market still ascribes meaningful brand value. In short, the market is pricing a slow, cost-led turnaround with limited earnings visibility — not a collapse, but not a recovery either.
From a pure risk/reward standpoint, NKE offers a balanced but not compelling setup at $38.59. The upside case is anchored by the $60.00 analyst high target (roughly +55%) and a 1.47x PS ratio that is a fraction of the 15.27x seen in Q4 FY22, while the downside is defined by the $31.97 52-week low (-17%) and the $19.00 analyst low (-51%). The consensus target of $36.42 sits 5.6% below spot with 24 Hold and 9 Sell ratings against only 10 Buys, meaning the Street sees the recent 12.31% one-month bounce as overdone. The biggest near-term risk is a dividend cut given the 77.4% payout ratio and -$64 million quarterly free cash flow. It is a reasonable buy only for patient, income-tolerant investors willing to scale in near the $31.97-$34 support zone and hold through a multi-year turnaround; for anyone seeking near-term catalysts or growth, the evidence does not support new capital at current levels.
NKE is better suited to a long-term holding period of at least 18-24 months than to short-term trading. The turnaround timeline is the key constraint: Zacks notes 'Win Now' cost savings may not offset revenue declines until 2029-2030, so earnings visibility is low and the forward PE of 24.93x exceeding trailing signals expected EPS shrinkage near term. The beta of 1.031 offers little market diversification, but the -52.91% max drawdown and 37-point 52-week range ($31.97-$69.14) mean idiosyncratic catalysts, not market moves, drive returns — a poor fit for tight stop-loss trading. The 3.53% dividend yield provides some compensation for waiting, though the 77.4% payout ratio makes it less reliable than history suggests. A concrete approach is a staged accumulation over 12-24 months near the $31.97-$34 support zone, reassessing if gross margin fails to hold above 42% or free cash flow stays negative for another two quarters.