Nike Looks Broken, But It Might Be A Bargain

Daniel Schönberger
13K Followers
(15min)

Summary

  • Nike is currently undervalued, trading at least 25% below intrinsic value, with low P/E and P/FCF multiples near 10-year lows.
  • Short-term struggles persist: revenue and EPS have declined for four consecutive quarters, with further weakness expected due to tariffs and macro headwinds.
  • Despite near-term challenges, Nike's strong brand, product diversification, and share buybacks position it for long-term growth and recovery.
  • I rate NKE stock a cautious long-term buy, expecting above-average returns for investors willing to weather potential further downside.

Nike Running Store

winhorse/iStock Unreleased via Getty Images

Over the long run, Nike, Inc. (NYSE:NKE) has been a great investment, and early investors became very rich. However, in the last few years, Nike did not only underperform the S&P 500, but investors actually did lose a

This article was written by

13K Followers
My analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large cap to small cap companies).My academic background is in sociology and I hold a Master’s Degree in Sociology (with main emphasis on organizational and economic sociology) and a Bachelor’s Degree in Sociology and History.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of NKE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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