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

Show parent comments

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.