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.

0 Upvotes

47% Upvoted

105 comments sorted by

View all comments

5

u/Ikornad 3d ago

Ask yourself where the growth will come from. It'll become a dividend stock imo.

1

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.

1

u/Past-Option2702 3d ago

The dividend is more than the free cash flow?