Nike
NKE
$36.80
+0.49%
Nike, Inc. is the world's largest athletic footwear and apparel brand, designing and marketing performance products across basketball, running, soccer, and training, with footwear generating roughly two-thirds of sales, complemented by the Jordan, NikeSkims, and Converse labels. The company operates a vertically integrated brand ecosystem spanning company-owned stores, a network of roughly 5,500 franchised doors in China, third-party retail partners, and e-commerce platforms in more than 40 countries, with nearly all production outsourced to contract manufacturers across 30-plus nations. The current investor narrative is dominated by a severe multi-year downturn: the stock has fallen roughly 76% from its prior high and touched a 12-year low in August 2026, with debate centering on whether tariff headwinds are peaking, whether gross margin can expand, and whether Greater China demand can stabilize. Analysts and media coverage frame Nike as a deep-value, unconfirmed turnaround story, with bulls pointing to a depressed valuation and a 3.5% dividend yield while bears cite persistent revenue declines, Dow Jones index-removal risk, and the absence of a confirmed earnings inflection.…
NKE
Nike
$36.80
Related headlines
Investment Opinion: Should I buy NKE Today?
The synthesized recommendation is Hold. Nike is a high-quality brand trading at a deep discount, but the lack of a confirmed turnaround and deteriorating fundamentals warrant caution. The analyst consensus is Hold with a mean rating of 2.68 and an average target price of $49.35, implying 34.1% upside, but the wide target range ($23 to $94) reflects low conviction.
Supporting evidence includes a forward PE of 16.06x, which is below the trailing PE of 21.87x and suggests expected earnings recovery. Revenue growth is negative at -1.13% year-over-year, but the most recent quarter showed a gross margin of 49.15%, up from 40.16% in the prior quarter. The dividend yield of 3.53% and payout ratio of 77.4% provide income but limit flexibility. Free cash flow of $2.184 billion is positive but thin, and the PS ratio of 1.47x is at a historical low, indicating deep value. However, the PEG ratio is negative, and ROE of 20.91% is respectable but declining.
The biggest risks are continued revenue declines, margin compression, and potential Dow Jones removal. The rating would upgrade to Buy if revenue growth turns positive and gross margin stabilizes above 45%, or downgrade to Sell if revenue declines accelerate beyond -5% or free cash flow turns negative. Relative to its history, the stock is undervalued, but the discount is justified by fundamental deterioration; it is fairly valued at best until a turnaround is confirmed.
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NKE 12-Month Price Forecast
Nike presents a classic deep-value turnaround story with significant risks. The stock is trading near a 12-year low, and while the valuation is attractive, the lack of revenue growth and margin compression are concerning. The dividend provides some support, but the high payout ratio limits flexibility. Analyst sentiment is neutral, with a wide target range reflecting uncertainty. A confirmed inflection in revenue and gross margin would be necessary to upgrade to bullish, while a breakdown below the 52-week low could lead to a downgrade to bearish. The risk/reward is balanced, favoring a wait-and-see approach.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nike's 12-month outlook, with a consensus price target around $49.35 and implied upside of +34.1% versus the current price.
Average Target
$49.35
0 analysts
Implied Upside
+34.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$23 - $94
Analyst target range
Nike is covered by 36 analysts, and the consensus recommendation is a Hold with a recommendation mean of 2.68 on a scale where 1 is Strong Buy and 5 is Strong Sell, reflecting a distinctly neutral-to-cautious stance. The average price target of $49.35 implies approximately +34.1% upside from the current price of $36.80, which on the surface looks attractive, but the consensus EPS estimate of $3.00 and revenue estimate of $46.4 billion suggest analysts expect only modest recovery rather than a sharp rebound. The institutional ratings list is dominated by Neutral, Equal Weight, Hold, and Market Perform actions from firms including B of A Securities, Wells Fargo, UBS, Citigroup, Stifel, and Telsey Advisory Group, with only Baird, Jefferies, and Bernstein carrying Outperform or Buy ratings and BNP Paribas maintaining an Underperform — a distribution that leans bearish-to-neutral despite the headline upside.\n\nThe target price range is extraordinarily wide, spanning from a low of $23.00 to a high of $94.00 — a 4.1x spread that signals very low analyst conviction and high uncertainty about Nike's trajectory. The $94.00 high target implies a full multiple re-rating and successful execution of a multi-year turnaround with margin expansion and Greater China stabilization, while the $23.00 low target prices in continued revenue decline, margin compression, and possible loss of brand relevance. Notably, the low target of $23.00 sits 37.5% below the current price, meaning even the bear case has not been fully priced in, and the fact that the stock is trading below the average target while analysts maintain Hold ratings suggests the market is discounting the consensus view. With no recent upgrades visible in the institutional ratings data and the stock at a 12-year low, the burden of proof remains on Nike to demonstrate a fundamental inflection before analyst sentiment is likely to shift meaningfully.
Bulls vs Bears: NKE Investment Factors
The bear case currently has stronger evidence, driven by persistent revenue declines, margin compression, and severe technical weakness, with the stock at a 12-year low. However, the bull case rests on deep value, a sustainable dividend, and potential tariff relief, with analyst targets implying significant upside. The most important tension is whether Nike can return to revenue growth and expand margins; without a confirmed inflection, the stock may remain under pressure despite its cheap valuation. The balance sheet is healthy, but cash flow deterioration and inventory buildup are concerning. A turnaround would require stabilization in Greater China and a rebound in footwear sales, which are not yet evident.
Bullish
- Deep Value Valuation: NKE trades at a trailing PE of 21.87x and a PS ratio of 1.47x, which is dramatically below its historical PS multiple of 6.21x a year ago and 8.15x two quarters back. The forward PE of 16.06x implies the market is pricing in a significant earnings recovery, and the stock's 1.47x PS is the lowest in the dataset since 2021.
- Attractive Dividend Yield: The dividend yield stands at 3.53%, well above the S&P 500 average, and the payout ratio of 77.4% is sustainable given the company's strong balance sheet with a current ratio of 1.96 and interest coverage of 11.6x. This provides income support while awaiting a turnaround.
- Analyst Upside Potential: The average analyst target price of $49.35 implies 34.1% upside from the current price of $36.80, and the high target of $94.00 suggests a potential 155% gain if the turnaround succeeds. Despite a Hold consensus, the wide target range indicates significant optionality.
- Brand Strength and Global Reach: Nike remains the world's largest athletic footwear and apparel brand, with footwear generating about two-thirds of sales and a presence in over 40 countries. The brand's scale and marketing power provide a competitive moat that could facilitate a recovery.
Bearish
- Persistent Revenue Decline: Revenue in the latest quarter fell 1.13% year-over-year to $10.972 billion, marking a sequential decline from $12.427 billion two quarters ago. The core footwear segment, which drives two-thirds of sales, is the primary drag, and there is no evidence of an inflection.
- Margin Compression and Earnings Volatility: Trailing gross margin is 42.91% and operating margin is 8.19%, well below historical norms. Quarterly EPS has been volatile, ranging from $0.35 to $0.72 over the past four quarters, with no consistent upward trajectory, and net margin has compressed to 9.74% from higher levels.
- Weak Cash Flow and High Payout: Trailing free cash flow is only $2.184 billion, yielding a thin FCF yield of 3.2%, and the payout ratio of 77.4% consumes the majority of earnings. Working capital consumed $2.34 billion in the latest quarter, and the cash conversion cycle of 111.6 days indicates capital tied up in unsold inventory.
- Dow Jones Removal Risk: Recent news predicts Nike could be booted from the Dow Jones Industrial Average within 12 months due to its low share price and weak performance. Such a removal could trigger index fund selling and further depress the stock.
NKE Technical Analysis
Nike is in a sustained, severe downtrend, with the shares down 50.49% over the past year and 41.85% year-to-date, dramatically underperforming the S&P 500's +16.22% 1-year and +12.08% YTD returns. At a current price of $36.80 against a 52-week range of $36.55 to $76.97, the stock is trading at just 0.6% above its 52-week low and only 47.8% of the way up its annual range, a positioning that signals capitulation-style weakness rather than a value opportunity with confirmed support. The maximum drawdown of -53.75% over the period underscores the depth of the decline, and with the stock sitting essentially on its low, the burden of proof rests on buyers to demonstrate stabilization.\n\nShort-term momentum remains decisively negative and is diverging bearishly from an already weak long-term trend: the stock is down 9.16% over the past month and 18.09% over three months, meaning the decline is accelerating rather than decelerating. Relative strength versus the S&P 500 is deeply negative across every window — -8.10% over 1 month, -21.13% over 3 months, -47.23% over 6 months, and -66.71% over 1 year — confirming that capital is actively rotating out of Nike rather than merely tracking broad market weakness. The most recent session showed a modest +0.49% bounce to $36.80 from a prior close of $36.62, but with volume of roughly 19.9 million shares and a short ratio of 2.79 days, this looks like a minor oversold rebound within a dominant downtrend rather than a trend reversal.\n\nKey technical levels are tightly defined: immediate support sits at the 52-week low of $36.55, just $0.25 below the current price, and a decisive breakdown below that level would open the door to further price discovery to the downside with no historical reference points. Resistance is anchored at the 52-week high of $76.97, more than double the current price, with intermediate resistance likely forming around the $40 psychological level that bulls have repeatedly defended. With a beta of 1.11, Nike is roughly 11% more volatile than the broader market, meaning position sizing should account for amplified moves in both directions; combined with the stock's proximity to multi-year lows, risk management favors waiting for a confirmed higher low before establishing long exposure.
Beta
1.11
1.11x market volatility
Max Drawdown
-53.8%
Largest decline past year
52-Week Range
$37-$77
Price range past year
Annual Return
-50.5%
Cumulative gain past year
| Period | NKE Return | S&P 500 |
|---|---|---|
| 1m | -9.2% | -1.6% |
| 3m | -18.1% | +1.3% |
| 6m | -31.8% | +13.9% |
| 1y | -50.5% | +16.3% |
| ytd | -41.8% | +12.1% |
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NKE Fundamental Analysis
Nike's revenue trajectory has turned negative, with the most recent quarter (ending 2026-05-31) posting revenue of $10.972 billion, a year-over-year decline of 1.13%, following $11.279 billion in the prior quarter and $12.427 billion two quarters before that. The multi-quarter trend shows sequential deceleration from the $12.4 billion peak, and the segment mix — footwear at $15.04 billion, apparel at $7.573 billion, and other products at $79 million — highlights that the core footwear franchise, which drives roughly two-thirds of sales, is the primary drag. With estimated forward revenue of $46.4 billion against a shrinking top line, the investment case hinges entirely on whether Nike can return to growth, and the current data offers no evidence of an inflection.\n\nProfitability remains intact but is compressing: the latest quarter delivered net income of $1.069 billion on a net margin of 9.74%, down sharply from the $1.163 billion and 9.41% net margin in the year-ago November quarter, while gross margin of 49.15% in the most recent quarter masks significant volatility — the prior quarter's gross margin was just 40.16%, and the year-ago quarter was 40.27%. The trailing gross margin of 42.91% and operating margin of 8.19% are well below the company's historical norms, reflecting promotional activity, tariff costs, and mix pressure. The quarterly EPS progression of $0.72, $0.35, $0.54, and $0.49 over the trailing four quarters shows no consistent upward trajectory, and with a payout ratio of 77.4%, the dividend is consuming the majority of earnings, limiting reinvestment capacity.\n\nThe balance sheet is reasonably healthy but cash generation has weakened materially: debt-to-equity stands at 0.742, the current ratio is a solid 1.96, and ROE of 20.91% remains respectable, but trailing free cash flow has fallen to just $2.184 billion against a market cap of $68.1 billion, a thin FCF yield of roughly 3.2%. Operating cash flow in the latest quarter was $1.637 billion with capital expenditure of only $138 million, producing free cash flow of $1.499 billion, but this was flattered by a $2.908 billion non-cash adjustment and a $903 million favorable forex effect; working capital consumed $2.34 billion during the quarter. With cash of $7.563 billion and interest coverage of 11.6x, Nike can fund its dividend and modest capex internally, but the deteriorating cash conversion cycle of 111.6 days and inventory turnover of just 0.74x suggest the company is tying up capital in unsold product, a classic sign of demand weakness.
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?
Because Nike remains solidly profitable with trailing net income of $1.069 billion in the latest quarter and positive EPS of $0.0456 on a trailing basis, the PE ratio is the appropriate primary metric. The stock trades at a trailing PE of 21.87x versus a forward PE of 16.06x, a 26.6% compression that implies the market expects meaningful earnings recovery — forward EPS estimates of $3.00 versus the current depressed run-rate. However, the PEG ratio of -6.78 is negative and therefore meaningless as a growth-adjusted signal, reflecting the earnings decline rather than a valuation anomaly.\n\nRelative to the broader Consumer Cyclical sector, Nike's 21.87x trailing PE and 1.47x PS ratio screen as inexpensive for a dominant global brand, though the discount is justified by deteriorating fundamentals rather than being a pure mispricing. The EV/Sales of 1.21x and EV/EBITDA of 15.58x are moderate, but the price-to-cash-flow ratio of 23.74x and price-to-book of 4.58x are less compelling given the weak cash generation and declining ROE. Compared with its own history, the current 1.47x PS ratio is dramatically below the 6.21x PS ratio recorded in the same quarter a year ago and the 8.15x seen two quarters back, representing a roughly 76% compression in the sales multiple — a re-rating that reflects the market's loss of confidence in the brand's growth premium.\n\nOn a historical basis, Nike's current valuation sits at the bottom of its multi-year band: the PE of 21.87x compares with 44.41x two quarters ago, 108.20x a year ago, and a range of 24x to 50x over the past several years, while the PS ratio of 1.47x is the lowest in the entire dataset, which stretches back to 2021 when PS exceeded 23x. This extreme multiple compression means the market is pricing in a worst-case scenario of continued revenue decline and margin erosion, leaving limited downside from a pure valuation perspective — but also signaling that a re-rating requires tangible evidence of a fundamental turnaround, not merely a low multiple. Investors should recognize that cheap can get cheaper when the earnings base itself is shrinking.
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
15.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant: revenue declined 1.13% year-over-year in the latest quarter to $10.972 billion, with footwear sales dragging. Gross margin has been volatile, ranging from 40.16% to 49.15% over the past four quarters, and trailing operating margin is only 8.19%. Free cash flow has fallen to $2.184 billion, a thin 3.2% yield, and the payout ratio of 77.4% leaves little room for reinvestment. Inventory turnover of 0.74x and a cash conversion cycle of 111.6 days indicate demand weakness and potential write-downs. The debt-to-equity ratio of 0.742 is manageable, but interest coverage of 11.6x could deteriorate if earnings fall further.
Market and competitive risks include valuation compression if earnings fail to recover; the forward PE of 16.06x already prices in a rebound, so any disappointment could lead to multiple contraction. The stock's beta of 1.11 means it is 11% more volatile than the market, amplifying downside in a selloff. Competitive pressures from brands like Lululemon, which reported a 9% comparable sales decline, highlight a challenging consumer environment. Regulatory risks include the new Section 301 tariffs covering 60 countries at 10-12.5% rates, which could increase costs. Additionally, the potential removal from the Dow Jones Industrial Average could trigger forced selling by index funds.
In a worst-case scenario, continued revenue declines and margin erosion could push the stock below its 52-week low of $36.55, towards the analyst low target of $23.00, representing a 37.5% decline from the current price of $36.80. This could occur if Greater China demand fails to stabilize, tariffs increase costs, and the company loses brand relevance. The maximum drawdown over the past period was -53.75%, and a similar decline from the current price would take the stock to around $17.00. Investors could lose 37.5% to 53.75% in such an adverse scenario, with limited support until fundamental improvements emerge.
FAQ
The key risks include: 1) Financial risk: revenue declined 1.13% YoY, and free cash flow is only $2.184 billion with a high payout ratio of 77.4%. 2) Competitive risk: brands like Lululemon are struggling, indicating a tough consumer environment. 3) Macro risk: new Section 301 tariffs could increase costs, and the stock's beta of 1.11 makes it more volatile. 4) Company-specific risk: potential removal from the Dow Jones Industrial Average could trigger selling. The most severe risk is a continued revenue decline leading to further margin compression and a break below the 52-week low.
The 12-month forecast has three scenarios: Bull case (25% probability) targets $60-$94, driven by successful turnaround and margin expansion. Base case (50% probability) targets $45-$55, assuming modest recovery and earnings meeting the $3.00 EPS consensus. Bear case (25% probability) targets $23-$36.55, if revenue declines accelerate and the stock breaks its 52-week low. The base case is most likely, with the average analyst target of $49.35 as a key level. The critical assumption is that revenue stabilizes and gross margin holds above 43%.
NKE appears undervalued on a historical basis. The PS ratio of 1.47x is dramatically below its 6.21x from a year ago and 8.15x two quarters back, and the forward PE of 16.06x is below the trailing PE of 21.87x. Compared to the Consumer Cyclical sector, the stock trades at a discount, but this reflects deteriorating fundamentals. The market is pricing in a worst-case scenario of continued decline, so if the company stabilizes, the multiple could expand. However, the negative PEG ratio and weak cash flow suggest the discount may be justified until earnings recover.
NKE is a high-risk, high-reward opportunity. The stock trades at $36.80, near its 52-week low of $36.55, with a forward PE of 16.06x and a dividend yield of 3.53%. Analyst targets imply 34.1% upside to $49.35, but the consensus is Hold, and the bear case target is $23.00. The biggest downside risk is continued revenue decline and margin erosion, which could push the stock below $30. For value investors with a long horizon, it may be a good buy if they believe in the brand's turnaround potential; however, for risk-averse investors, waiting for confirmation of revenue growth is prudent.
NKE is more suitable for long-term investment (3-5 years) given its turnaround nature and dividend yield of 3.53%. The stock is in a severe downtrend, down 50.49% over the past year, and short-term momentum is negative, making it risky for traders. The beta of 1.11 indicates higher volatility, so short-term trading requires tight risk management. For long-term investors, the deep valuation and brand strength offer potential upside, but they must be patient and monitor quarterly progress. A minimum holding period of 2-3 years is suggested to allow the turnaround to materialize.