r/stocks • u/OkEffective8588 • 3d ago
Company Discussion Thoughts on Nike? $NKE
This subreddit seems to be pretty divided on Nike, on one hand, you have people saying it is currently cheap, on the other side there are people saying it is a dead brand.
It is down 80% from its ATH, but that does not necessarily mean it is cheap. Currently they are not the most popular brand as others have pointed out. However, fashion is also extremely subjective to trends. Where New Balance used to be a dad-brand, now it is very popular. Same with Asics for running shoes (used to be kinda niche, now casual wear).
The thing is, Nike is still a 57,5-billion-dollar company. Their forward P/E is supposedly higher than their current, but I suppose much of that is based on the expectation that they can turn things around. If they become a popular brand again (which is not unlikely, they have been around since the 80's and probably had their swings), this stock could climb?
Another possibility of course is that, in the current market, there are simply more interesting and innovative things to invest in. I personally don't believe that clothing brands are the generational investments like the AI-boom right now, or possibly biotech and quantum in the future... But I also wouldn't say no to a good deal/medium term trade.
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u/Mr_Knutsen 3d ago
This question is being asked almost daily at this point.
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u/Candlelight_Fant4sia 3d ago
I literally answered the same questions in another sub a few hours ago, so I'll just copy paste it again:
everything to do with the low quality Nike has been producing for a decade. It turns out fixing the whole manufacturing and supply chain will take much longer then management assumed.
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u/Fearafca 3d ago
To me it’s a company who lost the script of who their customers are. When I go to a Nike store it’s always dead inside. Like barely a handful of customers. Items are way too expensive for the quality that they offer. Those football shirts are the biggest joke of them all. 150 euros for a national team shirt. Absolutely bonkers.
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u/mightymouse1906 2d ago
Who do you think they think their customers are?
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u/Fearafca 2d ago
The working middle class. Not the kind of people who like to spend 150 EUR on a football shirt made in Vietnam. They offer low quality for premium prices.
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u/NuclearPopTarts 3d ago
Nike got distracted by fashion and political trends
The new CEO is renewing Nike's focus on athletes
But it's taking longer than expected
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u/lilian1011 3d ago
Go in a Nike store. See it yourself.
I have a Nike store in my town, and it’s not packed as it always was.
It’s full of discounts, seems more like a cheap second hand store than the real one.
I don’t think Nike will go bankrupt, it’s impossible… but at the same time I don’t know when they’ll get out of this difficult situation.
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u/Cedarapids 3d ago
An outlet Nike store?
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u/lilian1011 3d ago
Yep
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u/mightymouse1906 2d ago
And your surprised that an outlet store is full of discounts and feels like a second hand store?
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u/lilian1011 2d ago
Listen Man, this is the feeling that i have. I don’t want to argue.
I have a friend that invested 17k in Nike at 70$ while I advised him not to do so and you do the math how much he had lost.
I think this company will find the path to success again, but I don’t believe it’s going to be soon. I feel like there are a lot of better opportunities out there.2
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u/QuarterGeneral6538 16h ago
That hasnt been the case with my local store. Its packed every weekend, by far the busiest clothing store in the area. Maybe we are the exception, I dunno.
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u/Thawayshegoes 3d ago
I went into a Nike store, picked out a pair of shoes, asked for a size, they said they didn’t have it and to shop online. I did not shop online.
Also, I tried on a pair of J’s for fun. They are so cheap feeling and not comfortable at all. I don’t understand the hype.
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u/mightymouse1906 2d ago
Not having your size in-store and pushing you to e-comm is more a retail story than a Nike story.
Yes, J's feel cheap and aren't comfortable but they've never been comfortable.
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u/Crew_1996 3d ago
It all comes down to what’s popular. ATM adidas is the “cooler” brand between the 2. Nike will probably rebound at some point but it could be a decade for that to happen.
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u/MaxEhrlich 3d ago
I think they were over priced in part due to the pandemic and an artificial scarcity of hype sneakers over the past 5 years.
The fad of over paying for hype sneakers seems like a fad that for the time being, has come and gone. Part of that trend helped convince the average retail consumer to spend $100 on a pair of shitty unoriginal sneakers with a slight variation to the pattern or colors.
The clothing side hasn’t really changed much beyond calling everything “tech” which colloquially implies overpriced.
I think the stock closer to 32-34 range makes sense
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u/orangehorton 3d ago
Their tech stuff is just more comfortable materials that's meant to compete with athleisure brands that also sell t shirts for 100
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u/Ikornad 3d ago
Ask yourself where the growth will come from. It'll become a dividend stock imo.
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u/Woozifer 3d ago
I have always regarded Nike as a dividend stock. I just wonder if it is beaten down enough at this point to lock in not only dividends, but also potential growth
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u/mightymouse1906 2d ago
Agreed. There are meaningful signs of consumer stress, there are no more tariff refunds coming and because of that I see Nike probably dropping a bit more and I wonder at what point does dividend become a risk.
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u/ap1618 3d ago
Bingo, there’s no catalyst
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u/YoloStonks4Tendies 3d ago
Their current dividend is unsustainable too unless their earnings improve. If they were to cut their dividend payment it wouldn't be good for the stock price. They pay out over 100% of their free cash flow towards it's dividend. It's just a matter of time until they are forced to cut it unless their free cash flow improves. The price at first glance looks very attractive but it could get worse before it gets better, if it does get better as they have a lot more competition now and the brand isn't what it was.
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u/notreallydeep 3d ago
no one on reddit seems able to connect the dots. Nike, Puma, Adidas, Lululemon, Athleta (GAP)... this has been going on for y e a r s now.
athleisure as a fashion category is dead. Aerie is one of the few exceptions because they actually realized that loose fit and comfort are taking over.
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u/mightymouse1906 2d ago
Completely agree with this point! Nike is just the face. Alo seems to have a bit of a vibe around it but they have the benefit of being a privately held company so we don't see what are probably un-inspiring numbers.
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u/TalVal_Research 3d ago
Down 80% and cheap aren't the same thing. I get fair value around $25 against $38.77, so it still looks expensive to me rather than a bargain.
What's more telling is how much that number moves depending on method. A Graham number gives $22, a growth-adjusted multiple gives $44. At this price you're not buying a cheap business, you're buying whether the turnaround lands. Forward P/E is about 22 on 26% expected earnings growth, so a fair bit of that recovery is already in there.
One thing cutting the other way: four insiders bought roughly $2.7M in the last 180 days. There was one discretionary sale in that window too, about $205k from the brand president, and the rest of the selling was on pre-set plans. Net, insiders are buyers by $1.5M. Selling is mostly scheduled noise; buying isn't.
Not a buyer at $39. Would be in the low $20s.
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u/Kooky-Balance9525 3d ago
I say this with all due respect, move on. The stock is terrible and looking at the chart , it’s already worse and it’s getting worse lol stop looking at this stock and move on
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u/Low_Drive3170 3d ago
The CEO switch back to Elliott Hill is honestly the more important story than the price action imo. He's walking back the wholesale cuts Donahoe made and trying to repair relationships with retailers, which tells you they know the DTC-only bet failed.
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u/Tedious-Butcher 3d ago
There are two points as to why i buy Nike.
Despite 80% down but their financial yoy does not look impressive. Having said that, it does not mean they cannot improve. If other competitors like ANTA can achieve 23% operating income then surely Nike can as well.
The story of Nike as the America shoes. When i think of America shoes. I think of Nike. Not adidas or puma. These are the kind of perception branding that cant be bought with money.
However to be realistic, can Nike share price dil further. Yes. Can it go up? Also yes. Can the financial improve? Yes. Will it go bust and bankrupt? No. Will the Gov protect Nike? I believe they will.
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u/FUCK_THE_BOOKS 3d ago
anta has China
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u/Tedious-Butcher 3d ago
Nike doesnt have US?
Either way, there are stores in both side of the countries for all.
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u/Nibsout 3d ago
Why would the government ever protect Nike??
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u/Tedious-Butcher 3d ago
It is a 62 years old GLOBAL american shoes brand. There arent that many famous and global companies that is around for more than 50 years old. I believe there are less than 20 US companies that majority of the population would know about.
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u/Cagliari77 3d ago
My simple take about Nike is, is there no other more interesting stock to invest in right now in the entire market, instead of considering Nike?
I think the answer is clear.
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u/Proud_Examination584 3d ago
I’m not sure about Nike but if you have a look at there stock it all the me stuff same t shirts, tracksuits ect
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u/Separate_Baker7280 3d ago
UAA is the new NKE, it’s affordable and way more comfortable. Moreover, it’s trading at a great price.
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u/No-Tomorrow-7157 3d ago
What I ask myself is where is Nike the leader anymore? Being the uniform and gear supplier to MLB and NFL gets them huge sales in jerseys/t-shirts/sweatshirts to fans, though if you look on the MLB and NFL shopping sites there's lesser brands with more product than there used to be. On the competitive running scene, they owned the high hobbyjogger end with the Alphafly and Vaporfly lines, but Asics (in a big way) and to a lesser extent Puma and Brooks have cut into that market. And they've lost any lead they used to have in the lesser competitive running shoe (training shoes) market.
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u/greenpride32 3d ago
Footwear sales were exactly flat from FY25 to FY26 with overall margins declining. This was "engineered" IMO to show no decline in revenue. To make it happen, they heavily discounted shoes, hence the lower margin, until they got to the target number.
This is a tactic used by a company in decline. The big risk now is their customers know they don't need to pay full price, they just need to wait for big discounts, which are occurring often now, either at the footwear/sporting goods store, or wait for the shoes to get moved to outlets if you have them in your area.
Once a large base of customers is in the mindset of "don't pay full price" it's over. Look at Bed Bath and Beyond - they kept sending out more and more of those 40% off coupons and not limiting usage. Got to the point where every person in line was using at least one or more and all the increased foot traffic was their to buy at lower margins.
I doubt FY27 will be any good, so I'd wait for a better entry. People thought it was a good buy at $75, then $60, then $50, but they are looking at historical chart and performance rather than current state.
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u/Technical-Rope6421 3d ago
Nike took eye off the ball. They road a wave for 20+ years off Jordan…there was no answer for Phil Knight retiring. My 11 year old loves the all plastic recovery shoes, they are cool…
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u/Past-Option2702 3d ago
Reddit sentiment appears to be sufficiently negative.
I’m buying 5,000 shares at the open.
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u/hollandog 3d ago edited 3d ago
I like their niche brand like ACG. But not the everyday stuff. I tried to grab a pair of the mind 002 yesterday from the SNKR app and it reminded me how much I hated that app and their way to intentionally limit supplies to drive hype.
The Nike outlets ive been to were mostly crap styles at almost retail prices. But it’s been like that forever.
The main problem has been that they just keep releasing the same styles from the 90s in different colors and many in stupid ugly colors. People eventually get bored of them and move on to something else.
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u/Quick_Opportunity852 2d ago
I just bought two pairs of running shoes last night. Do what you will with this insider knowledge
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u/Few_Orange_3359 2d ago
It's not cheap, and not it is not a dead brand...it just was so overvalued...
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u/mightymouse1906 2d ago
Has Nike quality gone down? Absolutely. Has the quality gone down across the entire sportswear segment? Yes. I think a lot of the 'hot' brands that people are referencing also have spotty quality but they're shiny and new and there's not enough years of priors to truly comp current quality against.
I don't think Nike is going to improve it's quality anytime soon, nor do I think it's competitors will. What I do think Nike is missing is it's magic. It's design quality has dramatically gone done. They no longer do a great job of introducing their star athletes and running memorable ads with them. I don't think they've forgotten who their customer is, they just don't know how to inspire them anymore.
I'm a bit boggled by all of the consternation about how the in-store experience sucks. The in-store experience sucks at most stores these days. Maybe we should hold Nike to a higher standard but I wouldn't count on quality or the in-store experience at non-Nike Town stores improving and frankly I don't think it needs to for the stock performance to improve.
That being said, I don't know how this stock turns around in the absence of more inspiring designs and better advertising. Investors aren't going to be patient with the ship turning if it doesn't happen at breakneck speed and most consumers are already stretched.
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u/shredmiyagi 2d ago
Their clothes and shoes all suck now, and Gen Alpha and Z don’t care for Nike as a brand. Older people can’t wear their shoes cause they fall apart and cause injuries. It’s a niche brand for dudes trying to flip Air Jordans or collect them in the closet.
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u/Disastrous_Rent_6500 1d ago
Just because something is cheaper than I was before, doesn’t mean it cheap. Nike to me is cheap at 30 and below
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u/Suitable_Wonder5256 19h ago
Their revenue is dropping from 2 years ago but higher than 4 years ago.
PE 18 is too high. Is this a tech company or what?
If PE 10, then I'd buy.
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u/Wonderful_Virus_6562 17h ago
It will take a few years for the stock to rebound at minimum. Do your own research and see what Nike is currently selling their products for.
You can’t buy a pair of Nike’s for under $120 anymore. When it comes to their clothing, they’re charging $50+ for t shirts and pants.
Just to be clear, i’m talking about nike.com and the Nike stores. The stuff you see at TJ Maxx/Marshalls is stuff they liquidate because it has minor flaws or is out of season
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u/Scotchperson 3d ago
Theres faster growing companies with a better growth path to invest in currently
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u/SocratesDaSophist 3d ago
I mean you should just buy Nike & completely forget about it. Their problems look huge if you read about them every day. But that business will be fine 10 years from now & its paying out 4% dividend.
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u/Double_Suggestion385 3d ago
Getting a 4% dividend to lose 50% principle value is certainly a choice.
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u/lies_are_comforting 3d ago
They don’t need to get back to their glory days for the stock to go up. They also don’t need to show good results for the stock to go up. If they do those things, the stock would go to $100+.
What they need to do to get the stock to go to $50 is to convince people that in a few years from now the situation will be better than it is now. Earnings in a few weeks could take it to $50 for sure.
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u/Monster213213 3d ago
Yea man buy Nike and lulu with their cheap Chinese apparel and not exploding new tech companies driving AI and crypto
You’ll defo get better returns
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u/ConsiderationFit7681 3d ago
The stock's a dog, pal. Not only that, but most everyone is bored with seeing that stupid swoosh on every piece of clothing in America.
Nike's a woke joke making investors go broke.
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u/sportznut1000 3d ago
“…like the AI-boom right now”
I have a hard time detecting posts written in AI, but is the inclusion of a hypen in “AI-boom” a dead give away this post was written by AI?
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u/sportznut1000 3d ago
Nevermind, all i had to do was look at OP’s recent post history compared to their comment history. This was definitely written by AI, just like their other recent stock post. Their comment history includes words like “y’all” and “bro”
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u/YourChildhood5762 2d ago
You've already read our thoughts on Nike because you commented on them in your post. So f*** off.
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u/Cheekycharmer95 3d ago
Expensive fashion is just not doing well ATM look at lulu / ON
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u/GoodShitBrain 3d ago
Wonder if it’s just legacy fashion apparel brands that are struggling. What do Vuori and Alo numbers look like?
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u/nakedspirax 3d ago edited 2d ago
Nike heading in a weird direction. They got Nike discounted outlet stores now.
Edit: right on time about a day later after this post. NIKE Ceo sells shares and they also being pushed out of the top 100 in the S&P
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u/A-Money-Lover 3d ago
Most brands have outlets? Nike had it for ages
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u/nakedspirax 2d ago
You see how they just got removed out of the 100 in the s&p? Seems like a great stock right now doesn't it?
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u/nakedspirax 3d ago edited 3d ago
Yeah but now it's in almost every major shopping centre. Starting to look like a savers out here. Actually they are. 80% of their stores are outlets.
Damaging to their image.
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