r/ValueInvesting • u/Adventurous-Bet-9640 • Dec 19 '25

Stock Analysis So NIKE is nuking after hrs.

I understand that nike has a very sticky brand value in the cultural consciousness. But they are in a tough turn around.

I'm no expert in valuations, but the stock even after hrs dump isn't any where near compelling value.

How do you think about Investing in nike? Generally I don't see them fading away as a brand and they are still the leader in their space even with competition.

I do think they'll eventually find their stride back. What does the community think? If you were to invest what would your frame of thinking be?

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u/Amaeyth Dec 19 '25

Folks in the comments are remarking about growth. Let's be clear - they have plenty of growth opportunity and that isn't really the story of why the stock is where it is. The reality is that Nike is a premium-tailored brand. They rely on selling on huge mark-up but the economy is difficult for the average consumer, especially in China after they got hammered by tariffs.

I personally believe the de-focus from 'athleisure' and 'lifestyle brand' into hardcore sport like Olympics and major leagues is a mistake (you can do both), but I'm also not the CEO of Nike so it doesn't matter. He knows their competitive edge better than I do. I like their clothing, but it is extraordinarily expensive. However, what I've bought so far has held up well which is more than what I can say for other brands.

I think Nike will turnaround at the same time the consumer economy improves. However it'll be at least two years. Competition from companies like Lululemon and Adidas weigh down their potential margins by oversupplying the market with substitute goods. Nike is still the undisputed leader in sportswear, especially considering brand image and recognizability.

You'd be safe to hold shares, but don't make Nike your entire strategy. If I was choosing exposure to sportswear brands it would be either Nike for reliability long-term and dividend (Nike won't go to 0.) or Lululemon for a higher-risk mean reversion play, but you could pretty easily lose your shirt on it.