Analyses / NKE
Large-cap apparel recovery play; valuation compression from highs, dividend support, litigation overhang.
A free account reveals NKE's entry zone, price target & stop loss. Full 1-week to 1-year price forecasts are included with Pro.
The Thesis
▲ Bull Case
Stock down 45% from 52-week high ($80.17), trading at forward P/E 20.3x vs historical 25-30x — attractive after selloff. Gross margin solid at 42.7%; current ratio 2.21 signals healthy liquidity. Insider buying 54x vs selling 37x over recent period; 3.7% dividend yield with 71% payout ratio sustainable. Revenue flat YoY but 5Y CAGR 4.4% shows structural demand. If operational margin rebounds to 9-10% (vs current 8%), stock reprices higher.
▼ Bear Case
EPS down 16.8% YoY; forward growth muted. Trailing P/E 29.1x inflated by depressed earnings — not cheap on TTM basis. 7-Eleven trademark lawsuit adds uncertainty; reputational/IP risk. Operating margin compression (8% vs historic 10%+) signals pricing/mix pressure. Debt-to-equity not provided; balance sheet opacity. At $44, still 45% below 52W high — suggests market pricing in structural challenges, not just sentiment.
Valuation
Fair-to-Undervalued on forward basis; overvalued on TTM — score 68/100
Forward P/E 20.3x is 20-30% discount to historical, making it attractive IF earnings stabilize. Trailing P/E 29.1x inflated by depressed EPS. P/S 1.41x reasonable for brand-name apparel. P/B 6.88x elevated; reflects brand intangibles but suggests limited margin of safety.
Technical Levels
Support · $40.00 (52-week low; psychological floor) · $42.00 (Recent swing low; intermediate support) · $43.60 (Today's low; short-term support)
Resistance · $45.04 (Today's high; intraday resistance) · $48.00 (20-day MA approx; medium-term resistance) · $50.00 (Psychological; 3-month target zone)
RSI: Not provided
Financial Health
Score 72/100. Strong liquidity (current ratio 2.21). Margin deterioration (operating margin 8%) signals operational stress. Debt metrics opaque. Brand/intangibles dominate balance sheet; tangible book value only $8.78 vs price $44.09.
Catalysts
| Litigation outcome (7-Eleven trademark lawsuit) | Q1-Q2 2025 (est.) | High — dismissal/favorable ruling could unlock 5-10% relief rally; settlement/loss could weigh 5-15%. |
| Q2 FY25 earnings & margin guidance | Late Jan 2025 | High — reacceleration of operating margin (>8.5%) would support $50+ target; miss = retest $40. |
| Full-year FY25 revenue/EPS growth reset | Mar-Apr 2025 | Medium — if growth reaccelerates to +2-3%, valuation multiple re-rates higher. |
| Dividend sustainability / increase announcement | Quarterly or annual (ongoing) | Medium — 71% payout ratio leaves room for hikes; signals management confidence. |
Risk Flags
See NKE's full trade plan — free
Create a free account to unlock the exact entry, target, and stop — plus run live analysis on any of 5,000+ tickers. No card required.
Unlock NKE free →Recent News
You've read your 2 free analyses
Create a free account for unlimited analyses — every name on the page, plus live tools on 5,000+ tickers. No card required.
Read the full NKE analysis — free →Free to read · 2 analyses every 30 days without an account
More Analyses
NKE FAQ
Is NKE a buy right now?
Nike Inc's current read is a Value + Dividend + Recovery setup with 65 confidence over a 3-6 months horizon. Valuation: Fair-to-Undervalued on forward basis; overvalued on TTM. See the full bull and bear case above, or run a live analysis for the exact entry, target and stop.
Is NKE overvalued?
Fair-to-Undervalued on forward basis; overvalued on TTM (valuation score 68/100). Forward P/E 20.3x is 20-30% discount to historical, making it attractive IF earnings stabilize. Trailing P/E 29.1x inflated by depressed EPS. P/S 1.41x reasonable for brand-name apparel. P/B 6.88x elevated; reflects brand intangibles but suggests limited margin of safety.
What are the risks of buying NKE?
EPS down 16.8% YoY; forward growth muted. Trailing P/E 29.1x inflated by depressed earnings — not cheap on TTM basis. 7-Eleven trademark lawsuit adds uncertainty; reputational/IP risk. Operating margin compression (8% vs historic 10%+) signals pricing/mix pressure. Debt-to-equity not provided; balance sheet opacity. At $44, still 45% below 52W high — suggests market pricing in structural challenges, not just sentiment.