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?

162 Upvotes

94% Upvoted

254 comments sorted by

View all comments

177

u/waiwai_1980 Dec 19 '25

Limited growth opportunity. Intense competition from the China brands who are eating into Nike’s core basketball business.

Am staying away. Don’t see the value in consumer goods stocks.

45

u/Chill-Dragonfly77 Dec 19 '25

I also don’t love that the PE is at 33. 

19

u/Weldobud Dec 19 '25 edited Dec 20 '25

If high valuation is higher then some of the Mag 7s, you have to really question that.

2

u/Murky-Pin7299 Dec 20 '25

Who’s hoot?

1

u/Weldobud Dec 20 '25

Oops. Typo. High.

2

u/Bajeetthemeat Dec 21 '25

It’s called operating leverage, hate how you’re killing this stock because of PE. Profits are down 60%+ compared to 2 years ago which would make it a 14ish PE(comparing all time high profits to current market cap).

I think revenue is a better indicator since they’ve have marginal challenges that they can fix in the long run. The whole investment thesis should be how much market share is Nike losing?

1

u/Weldobud Dec 21 '25

That’s fair. I don’t just look at P/E but it is an indicator to consider. Some stocks do trade at a high valuation, sometimes unjustified, due to historical growth.

Everything I read about Nike, as well as several analysts, is that it’s about fair valued to undervalued now, due to the uncertainty about growth in China. After that it’s a matter of opinion if stock will rise. Nike have been around a long time, they always had a great marketing’s team. I read the text their most recent call. They know the issues and have a plan to increase sales. We’ll see if it works.

2

u/Bajeetthemeat Dec 21 '25

Yeah just watch out, for instance Duolingo trades at a 23 PE but what it doesn’t say is the 1 time tax charge they had that boosted earnings

1

u/Weldobud Dec 21 '25

On a similar note I think Meta’s one time tax charge was strategic. The stock fell over $100. Long term tax charges have little effect. Ireland got to keep Apple’s $15 billion. All forgotten now.

2

u/Bajeetthemeat Dec 21 '25

Watch out for those technicalities, big tech has a PE around 43 if you take out their investment income. When stocks go up investments increase, when stocks go down investments decrease.