NKE Nike, Inc.
A great brand in repair mode, but today’s price still assumes too much recovery.
The business
Nike designs and markets athletic footwear, apparel, and equipment, earning money through wholesale partners, owned stores, and digital channels. Its economics depend on brand heat, athlete and team endorsements, product innovation, global distribution, and pricing power. The core business is understandable, but fashion cycles and consumer relevance make the next decade less predictable than the historical averages suggest.
Quality gate · 86/100
Moat & management
| Moat | wide moat |
| Source | brand |
| Trajectory | eroding |
| Management | adequate |
Nike still owns one of the strongest global sports brands, unmatched athlete relationships, scale in marketing, and deep retail distribution. But the moat has narrowed recently as running, lifestyle, China, Converse, and digital/direct momentum have weakened while Adidas, On, Hoka, New Balance, Lululemon, and local China brands have taken share and attention.
Historically Nike returned capital well through buybacks and dividends, and leverage remains manageable. Recent strategy overemphasized direct-to-consumer and lifestyle franchises, hurting wholesale relationships and product freshness; the Elliott Hill reset is sensible but still unproven.
Owner-earnings inputs
| Owner earnings (TTM) | 1.05B |
| Owner-earnings yield | 1.6% |
| Free-cash-flow yield | 1.6% |
| Growth used (normalized) | 8.0% |
| Market-implied growth (reverse DCF) | 25.0% |
| Terminal growth | 3.0% |
| Discount rate (hurdle) | 9.6% |
Projected owner earnings
| Yr | Owner earnings | Growth | PV |
|---|---|---|---|
| 1 | 1.13B | 8.0% | 1.03B |
| 2 | 1.22B | 7.6% | 1.01B |
| 3 | 1.31B | 7.3% | 993.90M |
| 4 | 1.40B | 6.9% | 970.02M |
| 5 | 1.49B | 6.6% | 943.55M |
| 6 | 1.58B | 6.2% | 914.73M |
| 7 | 1.67B | 5.9% | 883.81M |
| 8 | 1.77B | 5.5% | 851.05M |
| 9 | 1.86B | 5.1% | 816.73M |
| 10 | 1.95B | 4.8% | 781.13M |
| 11 | 2.03B | 4.4% | 744.54M |
| 12 | 2.12B | 4.1% | 707.23M |
| 13 | 2.19B | 3.7% | 669.49M |
| 14 | 2.27B | 3.4% | 631.58M |
| 15 | 2.34B | 3.0% | 593.76M |
Key risks
- brand relevance continues to fade with younger consumers
- China weakness and local competition permanently reduce growth
- turnaround requires heavy promotion and marketing that depresses margins
Catalysts
- performance running and sport-led product innovation regain momentum
- wholesale reset improves marketplace health and inventory quality
Recent news
score · 8 articles
- 7-Eleven sues Nike over Air Max 95 sneakers
- What NIKE (NKE)'s CFO Transition and Campus Partnership Moves Mean For Shareholders
- Dow Tops 53,000 as Chip Stocks Re-Take the Lead: Stock Market Today
- NIKE's Wholesale Strength: A Signal of a Turnaround Ahead?
- Update: Nasdaq, S&P 500 Advance Amid Gains in Chipmakers While Crude Oil Slips
- Bear of the Day: Nike (NKE)
- Chip Stock Bounce Back Leads Nasdaq Climb
- Bank of America resets Nike stock target on recovery plan
⚠ maintenance capex ≈ min(capex, D&A), capped at FCF · Price pays for ~25%/yr owner-earnings growth over 15y (reverse DCF); model credits 8%. · Rich vs our conservative value, but a quality business is not a short — stance is WAIT for a better price, not sell.