Nike (NKE) AI Stock Analysis

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Nike

(NYSE:NKE)

Rating:69Neutral

Price Target:―

Nike's overall score reflects a mixed outlook, with strong financial health and strategic initiatives offset by technical weakness and revenue challenges. The company's robust balance sheet and profitability provide a solid foundation, but recent market performance and execution risks in key markets like Greater China weigh on the score. Valuation remains fair, suggesting potential for long-term appreciation if growth initiatives succeed.

Positive Factors

E-commerce Expansion

Nike is returning to Amazon for the first time since 2019, now supplying products directly, expanding its reach via the world's largest eCommerce platform.

New Partnerships

Apparel momentum is also set to take off with the upcoming launch of the Nike-SKIMS partnership, expected to drive renewed consumer interest.

Negative Factors

China Market Challenges

Greater China traffic was double-digit negative with comparable store sales down 7% year-to-date.

Geopolitical Tensions

Nike's growth in China has slowed significantly due to geopolitical tensions, impacting the company's overall performance.

Inventory Management

Inventory growth outpaced sales growth across every geography, indicating higher inventory levels than desired.

Nike (NKE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$90.51B

Dividend Yield2.57%

Average Volume (3M)18.77M

Price to Earnings (P/E)20.4

Beta (1Y)0.76

Revenue Growth-7.11%

EPS Growth-12.12%

CountryUS

Employees79,400

SectorConsumer Cyclical

Sector Strength72

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)0.54

Shares Outstanding1,178,102,800

10 Day Avg. Volume16,403,291

30 Day Avg. Volume18,770,246

Financial Highlights & Ratios

PEG Ratio-2.55

Price to Book (P/B)5.82

Price to Sales (P/S)0.00

P/FCF Ratio15.24

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$77.17

Price Target Upside25.85% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering29

Nike Business Overview & Revenue Model

Company DescriptionNike, Inc. (NKE) is a leading global designer, marketer, and distributor of athletic footwear, apparel, equipment, and accessories. Operating within the sports and lifestyle sectors, Nike is renowned for its innovative products and iconic brand presence. The company serves a diverse range of customers, including athletes and everyday consumers, through various retail channels and digital platforms worldwide. Nike's core products include a wide array of athletic shoes, sportswear, and performance equipment, catering to sports such as running, basketball, soccer, and more.

How the Company Makes MoneyNike makes money primarily through the sale of its athletic footwear, apparel, and equipment. The company's revenue model is centered around a combination of direct-to-consumer sales via its online platforms and physical retail stores, as well as wholesale distribution to third-party retailers. Key revenue streams include sales from its flagship Nike brand, as well as subsidiary brands like Converse and Jordan. Additionally, Nike benefits from strategic partnerships and endorsements with high-profile athletes and sports teams, which enhance its brand visibility and drive consumer demand. The company's earnings are further supported by its investments in marketing and product innovation, which help maintain its competitive edge in the global sportswear market.

Nike Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business segments such as footwear, apparel, and equipment, highlighting which areas are driving growth and where there may be opportunities or challenges.

Chart InsightsNike's revenue from key segments like Apparel and Footwear shows a decline in recent quarters, aligning with the earnings call's report of a 9% overall revenue drop. Challenges in Greater China and elevated inventory levels are significant headwinds. However, strategic initiatives in performance products and reduced promotions in Nike Digital aim to reignite growth. The focus on innovative launches and brand engagement, particularly in running and training, could drive future recovery, but near-term pressures on margins and sales remain.

Data provided by:

Main Street Data

Nike Financial Statement Overview

Summary

Nike demonstrates strong financial health with robust profitability and efficient cash flow management, though recent revenue contraction warrants attention. The balance sheet stability is a significant strength, with no leverage concerns. Continued focus on revenue growth will be critical to maintaining its financial momentum.

Income Statement

Positive

Nike's income statement shows a strong gross profit margin of 43.8% for TTM, indicating robust cost management and pricing power. However, a decrease in revenue from the previous fiscal year by 6.9% raises concerns. The net profit margin stands at 9.4%, reflecting solid profitability despite the revenue drop. The EBIT margin of 10.4% further corroborates Nike's operational efficiency.

Balance Sheet

Positive

The balance sheet reveals a healthy equity ratio of 100%, indicating strong financial stability and no leverage, as liabilities and equity are balanced. The debt-to-equity ratio is not applicable due to the equity matching assets, highlighting no financial leverage concerns. Return on equity stands at 11.9%, showing efficient use of shareholder funds.

Cash Flow

Positive

Nike's cash flow statement indicates a free cash flow growth of 9% from the previous fiscal year, showcasing effective cash management. The operating cash flow to net income ratio is 1.3, suggesting good cash conversion. However, the free cash flow to net income ratio of 1.18 points to some discrepancies between accounting profit and cash generation.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
47.82B	51.36B	51.22B	46.71B	44.54B	37.40B
	Gross Profit
20.95B	22.89B	22.29B	21.48B	19.96B	16.24B
	EBIT
4.97B	6.69B	5.06B	5.83B	6.14B	2.00B
	EBITDA
4.77B	7.16B	6.77B	7.51B	7.73B	4.23B
	Net Income Common Stockholders
4.51B	5.70B	5.07B	6.05B	5.73B	2.54B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.76B	11.58B	10.68B	13.00B	13.48B	8.79B
	Total Assets
37.96B	38.11B	37.53B	40.32B	37.74B	31.34B
	Total Debt
12.06B	11.95B	12.14B	12.63B	12.81B	13.02B
	Net Debt
4.09B	2.09B	4.70B	4.05B	2.92B	4.67B
	Total Liabilities
23.92B	23.68B	23.53B	25.04B	24.97B	23.29B
	Stockholders Equity
14.04B	14.43B	14.00B	15.28B	12.77B	8.05B
Cash Flow		Free Cash Flow
5.31B	6.62B	4.87B	4.43B	5.96B	1.40B
	Operating Cash Flow
5.85B	7.43B	5.84B	5.19B	6.66B	2.48B
	Investing Cash Flow
-579.00M	894.00M	564.00M	-1.52B	-3.80B	-1.03B
	Financing Cash Flow
-5.60B	-5.89B	-7.45B	-4.84B	-1.46B	2.49B

Nike Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price61.32

Price Trends

50DMA

61.14

Positive

100DMA

67.89

Negative

200DMA

73.46

Negative

Market Momentum

MACD

0.48

Negative

RSI

52.68

Neutral

STOCH

49.17

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NKE, the sentiment is Neutral. The current price of 61.32 is above the 20-day moving average (MA) of 59.63, above the 50-day MA of 61.14, and below the 200-day MA of 73.46, indicating a neutral trend. The MACD of 0.48 indicates Negative momentum. The RSI at 52.68 is Neutral, neither overbought nor oversold. The STOCH value of 49.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NKE.

Nike Risk Analysis

Nike disclosed 40 risk factors in its most recent earnings report. Nike reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Nike Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DECK	83 Outperform	$19.55B	20.02	39.80%	―	19.40%	32.70%
CROX	79 Outperform	$6.33B	6.91	53.70%	―	2.09%	26.18%
BIRK	76 Outperform	$10.60B	38.26	9.35%	―	18.55%	147.70%
SHOO	76 Outperform	$1.92B	11.42	19.51%	3.40%	10.17%	-4.71%
SKX	72 Outperform	$9.28B	14.92	14.67%	―	10.66%	9.44%
NKE	69 Neutral	$90.51B	20.40	31.93%	2.57%	-7.11%	-12.12%
Sector *	62 Neutral	$6.88B	11.26	2.78%	3.93%	2.65%	-22.00%

* Consumer Cyclical Sector Average

Performance Comparison

NKE

Nike

61.32

-28.40

-31.65%

CROX

Crocs

111.38

-31.24

-21.90%

DECK

Deckers Outdoor

126.09

-24.69

-16.37%

SKX

Skechers USA

62.05

-5.33

-7.91%

SHOO

Steven Madden

25.07

-15.49

-38.19%

BIRK

Birkenstock Holding plc

55.05

8.76

18.92%

Nike Earnings Call Summary

Earnings Call Date:Mar 20, 2025

(Q3-2025)

% Change Since: -14.67%|

Next Earnings Date:Jun 26, 2025

Earnings Call Sentiment Neutral

The call highlighted a series of strategic actions aimed at reigniting growth through product innovation and brand engagement, particularly in performance categories. However, significant challenges remain, particularly in terms of revenue declines, gross margin pressures, and difficulties in the Greater China market. The company is taking proactive steps to address these issues, but the extent of the challenges suggests a balanced outlook.

Q3-2025 Updates

Positive Updates

Performance Product Growth

The performance segment, specifically in running and training, showed growth, with running growing mid-single digits. New product launches like the Pegasus Premium and Vomero 18 have driven healthy volume and are expected to scale further.

Innovative Product Launches

NIKE launched several new products, including the Peg Premium and Vomero 18, that have received positive consumer responses. The new 24/7 collection in apparel exceeded sales expectations, highlighting successful innovation in both footwear and apparel.

NIKE Direct Promotional Reduction

NIKE Digital in North America reduced promotional days from over 30 to zero in January and February, indicating a shift towards a full-price business model.

Successful Brand Engagement

NIKE achieved significant brand impact through high-profile events such as the Super Bowl and NBA All-Star weekend, driving brand engagement with emotional storytelling and on-the-ground activations.

Negative Updates

Revenue Decline

Overall, revenues were down 9% on a reported basis and 7% on a currency-neutral basis, with major declines in NIKE Direct (down 10%) and wholesale (down 4%), largely due to challenges in Greater China.

Gross Margin Decline

Gross margins fell by 330 basis points to 41.5%, driven by higher markdowns, inventory obsolescence, and product costs.

Greater China Challenges

Revenue in Greater China declined by 15%, with significant decreases in both NIKE Direct and wholesale channels. The region is experiencing promotional market pressures and increased competition.

Inventory and Classic Franchises Issues

Inventory remains elevated, particularly in classic footwear franchises like Air Force 1, Dunk, and Air Jordan 1, impacting sales and requiring aggressive inventory management strategies.

Company Guidance

In the call, Nike provided extensive guidance on their strategic priorities and financial performance metrics. For the fiscal 2025 third quarter, revenues were reported to be down 9% on a reported basis and 7% on a currency-neutral basis. Nike Direct saw a decline of 10%, with Nike Digital dropping 15% and Nike Stores declining 2%. Wholesale revenues fell by 4%, primarily due to declines in Greater China. Gross margins decreased by 330 basis points to 41.5%, attributed to higher markdowns, wholesale discounts, and channel mix headwinds. The effective tax rate was 5.9%, compared to 16.5% the previous year, due to a one-time tax benefit. Earnings per share stood at $0.54. Inventory levels declined by 2% year-over-year, though they remain elevated across geographies. Nike's "Win Now" actions focus on reigniting brand momentum, elevating market presence, and accelerating product portfolio transitions, particularly in performance dimensions such as running and training. The company anticipates the fourth quarter to reflect the largest impact from these strategic actions, with headwinds expected to moderate thereafter. Additionally, Nike is focused on reducing promotional activity, particularly in the Nike Digital channel, and aims to significantly adjust their inventory mix in fiscal 2026.

Nike Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Nike Announces Major Leadership Restructuring for Growth

Positive

May 5, 2025

On May 5, 2025, Nike, Inc. announced significant changes to its Senior Leadership Team to support its ‘Win Now’ action plan and future growth. The company eliminated the President, Consumer, Product & Brand role, leading to Heidi O’Neill’s retirement after 26 years. The leadership restructuring includes Amy Montagne as President, Phil McCartney as EVP, Chief Innovation, Design & Product Officer, Nicole Graham as EVP, Chief Marketing Officer, and Tom Clarke as Chief Growth Initiatives Officer. These changes aim to enhance Nike’s focus on consumer engagement, innovation, and brand distinction, positioning the company for continued success.

Private Placements and Financing

Nike Secures New Credit Agreements with Bank of America

Neutral

Mar 10, 2025

On March 7, 2025, Nike, Inc. entered into two significant credit agreements with Bank of America and other financial institutions. The first is a 364-Day Credit Agreement providing up to $1 billion for working capital and general corporate purposes, with the option to increase the facility to $1.5 billion. The second is a Five Year Credit Agreement offering up to $2 billion, extendable to $3 billion, also for general corporate purposes. Both agreements allow for borrowings in multiple currencies and include covenants limiting certain corporate activities. Concurrently, Nike terminated prior credit agreements of similar nature, with no outstanding amounts as of the termination date.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.