Nike, Inc.
NKE
$44.19
-0.99%
Nike, Inc. is the world's largest athletic footwear and apparel brand. It is a global leader defined by its iconic brand portfolio, including Nike, Jordan, and Converse, and its extensive distribution network across owned, franchised, and third-party retail channels.
NKE
Nike, Inc.
$44.19
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Investment Opinion: Should I buy NKE Today?
Based on a synthesis of the data, Nike warrants a 'Hold' rating for most investors. While the stock appears oversold technically and possesses strong long-term brand fundamentals, the severe near-term profitability contraction and elevated valuation multiples relative to growth create significant uncertainty. Patient, long-term investors with high risk tolerance might consider initiating a small position, but most should wait for clearer signs of operational improvement before committing capital. This assessment is based on objective analysis of financial metrics, valuation data, and market conditions.
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NKE 12-Month Price Forecast
The analysis yields a neutral stance with medium confidence. Powerful countervailing forces exist: severe fundamental deterioration against an oversold price and strong brand equity. The base case of gradual stabilization is most probable, but the wide potential outcomes reflect high uncertainty around Nike's ability to execute its turnaround.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nike, Inc.'s 12-month outlook, with a consensus price target around $57.45 and implied upside of +30.0% versus the current price.
Average Target
$57.45
14 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
14
covering this stock
Price Range
$35 - $57
Analyst target range
Wall Street analyst coverage shows a mix of opinions with recent actions. Among recent ratings, there is one Buy/Overweight (BTIG, Keybanc), one Outperform (RBC Capital), three Hold/Market Perform/Neutral (Telsey, Deutsche Bank, UBS), and one downgrade from Buy to Hold (Needham). The consensus appears cautiously optimistic but tempered, with several firms maintaining a neutral stance. Analyst estimates for the upcoming period average an EPS of $4.25 on revenue of $58.27 billion.
Bulls vs Bears: NKE Investment Factors
Nike presents a classic turnaround investment case. Its powerful brand and financial strength are countered by severe near-term operational challenges, including profit contraction and stagnant growth. The stock's deep decline has priced in significant pessimism, creating potential for recovery if management's initiatives gain traction.
Bullish
- Strong Brand and Market Position: World's largest athletic brand with iconic portfolio and global reach.
- Robust Financial Health: Strong balance sheet with $2.48B FCF, 2.21 current ratio, and manageable debt.
- High Return on Equity: ROE of 24.4% indicates efficient use of shareholder capital.
- Deeply Oversold Technicals: Trading near 52-week low, down 34% from high, suggesting potential rebound.
Bearish
- Severe Profitability Contraction: Net income down 34.5% YoY, net margin compressed to 4.6% from 7.0%.
- Stagnant Revenue Growth: Q3 revenue grew only 0.09% YoY, indicating significant top-line pressure.
- Elevated Valuation Multiples: Trailing P/E of 27.95 is high given negative earnings growth (PEG -0.66).
- Persistent Downtrend: Stock down 29.2% over 6 months, underperforming S&P 500 by 26.3%.
NKE Technical Analysis
Overall Assessment: The stock has been in a pronounced downtrend over the last six months, with a price decline of 29.2% from October 2025 to March 2026. This performance significantly underperformed the broader market, as indicated by a -26.3 relative strength over six months. The trend accelerated sharply in March 2026, with the stock falling from the low $60s to a low near $51.
Short-term Performance: The stock has experienced severe short-term weakness, declining 15.1% over the past month and 17.1% over the past three months. This recent underperformance is stark when compared to the S&P 500, which fell only 5.25% and 4.63% over the same periods, respectively. The price action shows a clear breakdown from a consolidation range in February into a new leg lower.
Current Position: As of the latest close at $52.82, the stock is trading near the bottom of its 52-week range of $50.95 to $80.17, representing a significant 34.1% discount from its yearly high. The current price is just 3.7% above the 52-week low, indicating the stock is in deeply oversold territory from a range perspective.
Beta
1.32
1.32x market volatility
Max Drawdown
-45.6%
Largest decline past year
52-Week Range
$43-$80
Price range past year
Annual Return
-32.0%
Cumulative gain past year
| Period | NKE Return | S&P 500 |
|---|---|---|
| 1m | -25.6% | -3.6% |
| 3m | -30.2% | -4.0% |
| 6m | -38.6% | -2.0% |
| 1y | -32.0% | +16.2% |
| ytd | -30.2% | -3.8% |
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NKE Fundamental Analysis
Revenue & Profitability: Recent quarterly performance shows pressure. Revenue for Q3 2026 was $11.28 billion, representing minimal year-over-year growth of 0.09%. Profitability has contracted sharply, with net income for the quarter at $520 million, down from $794 million in the year-ago quarter. The net margin compressed to 4.6% from 7.0% a year prior, reflecting significant margin pressure.
Financial Health: The company maintains a strong balance sheet with a healthy current ratio of 2.21, indicating good short-term liquidity. The debt-to-equity ratio is manageable at 0.83. Cash flow generation remains robust, with trailing twelve-month free cash flow of $2.48 billion, providing ample financial flexibility for operations, dividends, and share repurchases.
Operational Efficiency: Return on Equity (ROE) remains strong at 24.4%, indicating efficient use of shareholder capital. However, Return on Assets (ROA) is a modest 5.0%, suggesting the asset base is not generating exceptionally high returns. The latest quarterly gross margin of 40.2% shows a decline from historical levels, pointing to potential pricing or cost pressures.
Quarterly Revenue
$11.3B
2026-02
Revenue YoY Growth
+0.00%
YoY Comparison
Gross Margin
+0.40%
Latest Quarter
Free Cash Flow
$2.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NKE Overvalued?
Valuation Level: As Nike has positive net income, the primary valuation metric used is the Price-to-Earnings (P/E) ratio. The trailing P/E ratio is 27.95, while the forward P/E is 23.75 based on analyst EPS estimates. This forward multiple suggests the market is pricing in future earnings recovery, but the current trailing multiple remains elevated relative to the company's recent growth challenges.
Peer Comparison: Industry average valuation data is not available in the provided inputs for a direct peer comparison. However, the Price-to-Sales (P/S) ratio of 1.94 and Enterprise Value-to-Sales (EV/Sales) of 1.74 provide alternative valuation perspectives. The negative PEG ratio of -0.66, driven by negative earnings growth expectations, highlights the core challenge facing the stock's valuation narrative.
PE
27.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 24x~106x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
20.7x
Enterprise Value Multiple
Investment Risk Disclosure
Nike faces significant execution and market risks. Operationally, the company is struggling with margin compression (gross margin down to 40.2%) and declining profitability (net income down 34.5% YoY), suggesting fundamental challenges in its business model or competitive environment. The negative PEG ratio (-0.66) indicates the market expects earnings to decline further, creating valuation risk despite the recent price drop.
External risks include broader market pressures, as noted in recent news about geopolitical tensions and stagflation fears that could further pressure consumer discretionary spending. Nike's high beta of 1.286 means it's likely to experience amplified volatility during market downturns. Additionally, the company's turnaround plan, particularly its channel reset strategy, carries implementation risk and may take longer than expected to show results, testing investor patience as recent news headlines suggest.
FAQ
Key risks include continued margin pressure (gross margin fell to 40.2%), failure of the strategic channel reset to reignite growth, and a deteriorating consumer spending environment. The stock has a high beta of 1.286, making it sensitive to market downturns. Furthermore, the negative earnings growth expectation embedded in the PEG ratio signals the potential for further valuation contraction if operational results disappoint.
The 12-month outlook is centered on a base case target range of $58 to $68, implying modest upside from the current ~$53. This assumes gradual stabilization and meeting analyst EPS estimates of $4.25. A bull case to $70-$80 is possible with successful turnaround execution, while a bear case could see a retest of the 52-week low near $51. The wide range reflects the high uncertainty surrounding the company's near-term operational trajectory.
NKE's valuation presents a mixed picture. It appears overvalued based on traditional growth metrics, with a high trailing P/E of 27.95 and a negative PEG ratio of -0.66 due to expected earnings decline. However, it may be undervalued on a forward-looking basis if the anticipated EPS recovery to $4.25 materializes, justifying its forward P/E of 23.75. The current price near 52-week lows suggests market pessimism may be overdone relative to the company's enduring assets.
NKE is a high-risk, high-potential turnaround candidate, not a clear-cut 'good buy' at this moment. The stock is deeply oversold, down 34% from its 52-week high, and the company maintains a strong brand and balance sheet. However, severe profitability contraction (net income down 34.5%) and stagnant revenue growth create significant uncertainty. It may suit patient, long-term investors willing to bet on a successful corporate reset.
NKE is only suitable for long-term investment at this juncture. The company is in the midst of a multi-quarter (if not multi-year) turnaround effort, and near-term volatility is likely to remain high. Short-term traders face significant risk from earnings uncertainty and negative momentum. Long-term investors can potentially benefit from the powerful brand if management successfully navigates the current challenges, but they must be prepared for a potentially rocky journey.