NIKE, Inc. NKE
Verdict: Sell. Fair value $59.90 against a price of $63.84 on 6 Jan 2026, 6% below the price.
In plain words
The case for: Wide competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. Net Income declined 43.5% (from $5.70B to $3.22B) and Operating Cash Flow declined 50.2% (from.... Revenue decreased by 9.8% in FY2025, following a period of near-zero growth (+0.27%) in FY2024.....
Main risks
- Severe Profitability Decline: Net income dropped 43.5% from $5.70B in 2024 to $3.22B in 2025, and TTM Free Cash Flow ($2.48B) is at a multi-year low, indicating significant margin pressure and operational challenges.
- Negative Revenue Growth: After a period of growth, revenue declined by 9.8% in the latest fiscal year (2025 vs 2024), signaling a potential peak in demand or loss of market share.
- Value-Destructive Capital Allocation: The calculated 3-year ROIIC is deeply negative (-271%), suggesting that capital invested over the last three years has failed to generate positive returns and has coincided with a significant drop in operating profit.
- Net Income declined 43.5% (from $5.70B to $3.22B) and Operating Cash Flow declined 50.2% (from...
- Revenue decreased by 9.8% in FY2025, following a period of near-zero growth (+0.27%) in FY2024....
- Intense competitive environment