NIKE's high P/E ratio and declining stock performance raise concerns about future growth

From Nasdaq: 2025-06-25 10:55:00

NIKE Inc. (NKE) faces concerns over its high forward P/E ratio of 31.58X, exceeding industry average. Its low Value Score and high P/S ratio make the stock seem expensive. Competitors like adidas and Skechers trade at more reasonable multiples, raising questions about NKE’s valuation and growth prospects.

NKE’s stock has declined by 18.9% YTD, underperforming the Consumer Discretionary sector. Sales challenges in lifestyle segments and Greater China impact growth. Guidance for Q4 2025 indicates a significant revenue decline and contraction in gross margin, leading to investor skepticism about NKE’s future performance.

Zacks Consensus Estimate shows a decline in NKE’s sales and EPS for fiscal 2025, with a slight growth projected for fiscal 2026. With uncertainties ahead, investors may consider liquidating positions due to NKE’s premium valuation, slowing growth, and challenging market conditions. Waiting for signs of stabilization may be prudent for prospective investors.

Despite some recent struggles, NIKE remains a strong brand with a global presence. Its stock trades below the 200-day moving average at $61.42, presenting a potential buying opportunity for investors looking for long-term growth in the athletic apparel industry. Ultimately, the decision to invest in NKE should be based on a thorough analysis of its financials and future prospects.



Read more at Nasdaq: Decoding NIKE’s High P/E Ratio: Bargain Buy or Overpriced Risk?