NKE Stock Risk & Deep Value Analysis
Nike Inc
Consumer Cyclical • Footwear & Accessories
DVR Score
out of 10
What You Need to Know About NKE Stock
We analyzed Nike Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran NKE through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
NKE Risk Analysis & Red Flags
What Could Go Wrong
The turnaround strategy could fail to reignite growth in key markets like China and address 'lagging innovation,' leading to sustained margin compression and market share erosion. If Q2 FY2026 guidance proves conservative or profitability declines further, the stock could re-rate even lower, challenging even recovery expectations.
Risk Matrix
Overall
Moderate
Financial
Medium
Market
Medium
Competitive
High
Execution
Medium
Regulatory
Low
Red Flags
- ⚠
Q1 FY2026 EPS down 30-35% YoY with revenue only +0.1% to +1% YoY.
- ⚠
Gross margin declined 320 bps YoY in Q1 FY2026, with further contraction guided for Q2.
- ⚠
S&P Global revised outlook to Negative on April 17, 2026, citing profitability pressures.
- ⚠
Greater China revenue declined 9% in Q1 FY2026, with 'no recovery signs' cited.
Upcoming Risk Events
- 📅
Further deterioration in Greater China sales
- 📅
Continued gross margin compression beyond Q2 guidance
- 📅
Intensified competitive pressure from rivals or new entrants
When to Reconsider
- 🚪
Exit if quarterly revenue shows consecutive YoY declines beyond Q2 FY2026.
- 🚪
Sell if gross margin falls below 40% for two consecutive quarters.
- 🚪
Significant insider selling from multiple executives.
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What Does Nike Inc (NKE) Do?
Market Cap
$65.75B
Sector
Consumer Cyclical
Industry
Footwear & Accessories
Employees
77,800
NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic and casual footwear, apparel, equipment, accessories, and services for men, women, and kids in North America, Europe, the Middle East, Africa, Greater China, the Asia Pacific, and Latin America. The company offers its products under the NIKE, Jordan, Jumpman, Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also provides a line of performance equipment and accessories, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities, as well as various plastic products to other manufacturers; distributes and licenses casual sneakers, apparel, and accessories; and markets apparel with licensed college and professional team and league logos. In addition, the company offers consumer services and experiences, including sport focused events and activations; fitness and activity apps; sport, fitness, and wellness content; and digital services and features in retail stores. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other wholesale accounts through NIKE-owned retail stores, independent distributors, licensees, sales representatives, and digital platforms. The company was formerly known as Blue Ribbon Sports, Inc. and changed its name to NIKE, Inc. in May 1971. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.
Visit Nike Inc WebsiteInvestment Thesis
Nike, while facing significant headwinds and undergoing a challenging turnaround, presents a potential long-term value opportunity for investors focused on a recovery play rather than hyper-growth. Its strong brand and balance sheet provide a foundation for eventual stabilization and a return to moderate growth, potentially yielding a 2-3x return from its current depressed levels if execution improves, particularly in key markets like China and through renewed innovation.
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NKE Price Targets & Strategy
12-Month Target
$62.34
Bull Case
$87.50
Bear Case
$30.20
Valuation Basis
Based on 30.4x forward P/E applied to $2.05 est. FY2026 EPS.
Entry Strategy
Consider dollar-cost averaging between $42-$45, aligning with recent insider buying levels ($42.27) and the stock's current 11-year low.
Exit Strategy
Take 50% profit at $62 (median analyst target), 25% at $72 (pre-struggle valuation), Stop loss at $39 (below recent support).
Portfolio Allocation
1-3% for moderate risk tolerance due to turnaround uncertainty.
Price Targets & Strategy
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Is NKE Financially Healthy?
Valuation
P/E Ratio
29.22
Forward P/E
29.48
EV/EBITDA
21.53
Price/Book
6.77
Price/Sales
1.94
Profitability
Gross Margin
40.81%
Operating Margin
6.03%
Net Margin
4.84%
Return on Equity
16.41%
Revenue Growth
-2.71%
EPS
$1.52
Balance Sheet
Current Ratio
2.21
Quick Ratio
1.31
Debt/Equity
0.60
Other
Beta (Volatility)
1.13
Dividend Yield
3.70%
Does NKE Have a Competitive Moat?
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🏰 Wide
Moat Trend
Eroding
Moat Sources
3 Identified
Nike's brand is one of the strongest globally, ensuring a highly durable moat. Its vast ecosystem of endorsements, retail presence, and intellectual property (design, patents) creates significant barriers to entry and customer loyalty. However, recent trends suggest this moat is experiencing some erosion due to competitive pressures and perceived 'lagging innovation'.
Moat Erosion Risks
- •Failure to adapt quickly to evolving consumer trends and preferences (e.g., athleisure, sustainability)
- •Intensified competition from both established sportswear brands and agile direct-to-consumer startups
- •Damage to brand reputation from supply chain issues or social controversies
NKE Competitive Moat Analysis
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NKE Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (General consumer brand, sentiment reflects market performance but no strong specific social media buzz for 10x growth).
Institutional Sentiment
Negative (Multiple analyst downgrades including Piper Sandler, Argus, Weiss, and HSBC. S&P Global Negative outlook).
Insider Activity (Form 4)
CEO Elliott Hill bought 23,660 shares ($~1M value) on April 13, 2026 at $42.27/share. Director John W. Rogers Jr. bought 4,000 shares on April 9, 2026. This indicates insider confidence in a turnaround.
Options Flow
Normal options activity (No specific unusual options flow data was provided).
Earnings Intelligence
Next Earnings
Estimated December 2025 (for Q2 FY2026)
Surprise Probability
Medium (Q1 beat revenue estimates but missed on profitability, and Q2 guidance is cautious).
Historical Earnings Pattern
Historically, NKE's stock reacts significantly to guidance, especially regarding international growth and margin outlook.
Key Metrics to Watch
Competitive Position
Top Competitor
Adidas (ADS)
Market Share Trend
Stable (23.05% market share, 12 months ending Q1 2026), but facing challenges to grow in specific segments/regions (e.g., China, digital).
Valuation vs Peers
Trading at an 11-year low, suggesting a discount relative to its historical valuation, but possibly still at a premium to smaller, faster-growing sportswear brands given its scale. Specific peer valuation metrics were not provided in the research.
Competitive Advantages
- •Globally recognized iconic brand power and emotional connection with consumers
- •Extensive global distribution network and supply chain efficiency
- •Significant R&D investment in athletic performance technology and product innovation
Market Intelligence
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What Could Drive NKE Stock Higher?
Near-Term (0-6 months)
- •Q2 FY2026 Earnings (Expected December 2025)
- •Progress in addressing 'lagging innovation' with new product lines
Medium-Term (6-18 months)
- •Stabilization and eventual recovery of Greater China revenue
- •Successful execution of cost-cutting and efficiency initiatives (e.g., job cuts)
- •Improved digital sales performance
Long-Term (18+ months)
- •Sustained global economic recovery boosting consumer spending on sportswear
- •Diversification into new high-growth athletic segments or adjacent markets
Catalysts & Growth Drivers
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What's the Bull Case for NKE?
- ✓
Consistent re-acceleration of digital sales and DTC growth
- ✓
Positive commentary and tangible improvements in Greater China sales performance
- ✓
Expansion of gross margins back towards historical levels
Bull Case Analysis
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Competing with NKE
See how Nike Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Nike Inc NKE | $65.8B | 1.0 | 29.2 | $46.3B | 4.8% | -2.7% | |
Amazon.com Inc AMZN | $2.9T | 2.0 | 32.3 | — | 12.2% | 14.2% | Compare → |
Home Depot Inc HD | $312.6B | 0.3 | 22.1 | $164.7B | 8.6% | 3.2% | Compare → |
McDonald's Corp MCD | $221.1B | 0.1 | 26.4 | — | — | — | Compare → |
Tesla Inc TSLA | $1.7T | 6.1 | 432.8 | $94.8B | 4.0% | 2.3% | Compare → |
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How Nike Inc Makes Money
Nike Inc. is a global leader in athletic footwear, apparel, equipment, and accessories. It generates revenue by designing, developing, marketing, and selling these products. The company primarily sells its goods through wholesale channels to retailers globally and increasingly through its own direct-to-consumer (DTC) channels, including Nike-owned retail stores and e-commerce platforms like Nike.com and its apps. Nike leverages its powerful brand, innovative product design, and extensive marketing to drive sales to athletes and active lifestyle consumers worldwide.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Nike Inc (NKE)?
As of May 4, 2026, Nike Inc has a DVR Score of 1.0 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Nike Inc?
Nike Inc's market capitalization is approximately $65.8B. The company operates in the Consumer Cyclical sector within the Footwear & Accessories industry.
What ticker symbol does Nike Inc use?
NKE is the ticker symbol for Nike Inc. The company trades on the NYQ.
What is the risk level for NKE stock?
Our analysis rates Nike Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of NKE?
Nike Inc currently has a price-to-earnings (P/E) ratio of 29.2. This is in line with broader market averages.
Does Nike Inc pay a dividend?
Yes, Nike Inc pays a dividend with a current yield of approximately 3.70%.
Is Nike Inc's revenue growing?
Nike Inc has reported revenue growth of -2.7%. Revenue has been declining, which warrants closer examination.
Is NKE stock profitable?
Nike Inc has a profit margin of 4.8%. The company is profitable but margins are modest.
How often is the NKE DVR analysis updated?
Our AI-powered analysis of Nike Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 4, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for NKE (Nike Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.