Nike has reached a point where its stock chart is telling a very different story from the brand people still recognize around the world.
Shares closed at $39.09 on Monday, down 4.03%, marking their weakest close since September 2014. From Nike’s November 2021 record close of $169.74, the stock has lost roughly 78% of its value.
That is not just a bad quarter or a disappointing year. It is a long-running decline that has continued despite a broader bull market in US equities.
And now investors are left asking a much tougher question: Is Nike actually close to a turnaround, or does the stock still have further to fall?
The stock has been punished for a reason
Nike’s recent results have given investors little reason to believe that a meaningful recovery is already underway.
For fiscal 2026, revenue came in at around $46.4 billion, essentially flat on a reported basis and down 2% on a currency-neutral basis. Earnings also slipped.
The latest quarter showed similar pressure.
Revenue fell 1% year over year to about $11.1 billion, while digital sales dropped 26%. Greater China revenue fell 12%, highlighting one of the biggest challenges facing the company.
Nike has also been dealing with changing consumer preferences and tougher competition from brands such as On and Hoka.
The result is a business that still has enormous brand recognition, but is struggling to turn that strength into consistent sales growth.
The turnaround under Elliott Hill has not arrived yet
CEO Elliott Hill returned to Nike in October 2024 after spending more than three decades at the company.
His mission is straightforward: get Nike back to its core strengths, rebuild relationships with retailers and reconnect with consumers.
One major part of the strategy has been shifting away from Nike’s aggressive direct-to-consumer push and rebuilding its wholesale business.
There are signs that this part of the strategy is working.
Wholesale sales increased 6% to $27.5 billion.
But there is a catch.
Nike Direct sales fell 6% to $17.7 billion.
That matters because Nike’s direct business has historically been an important part of its growth strategy. The company now needs to prove that its wholesale recovery can offset weakness elsewhere without sacrificing profitability.
China remains a major problem
If Nike wants a sustained recovery, China will likely be one of the biggest pieces of the puzzle.
Greater China revenue fell 11% to $5.85 billion, while profit in the region dropped 20%.
The company is dealing with a difficult combination of cautious consumers, local competition and changing preferences.
China has historically been an important growth market for Nike, so continued weakness there makes it harder for the company to deliver the kind of revenue acceleration investors want to see.
Until that trend improves, it is difficult to make a strong case that Nike’s turnaround is fully underway.
Even the earnings headline needs a closer look
Nike’s reported earnings have also contained some unusual benefits.
In the latest quarter, diluted earnings per share looked much stronger year over year. But a large portion of that improvement came from a $0.52 per share benefit related to expected tariff recovery.
Gross margin also benefited from nearly $986 million in expected tariff refunds.
Take those benefits away and the underlying improvement looks much less impressive.
That is why some analysts remain cautious.
Evercore ISI analyst Michael Binetti has argued that there are still no clear signs of revenue returning to positive growth in the near term.
The valuation is not exactly screaming cheap
Nike’s share price has fallen dramatically, but that does not automatically mean the stock is a bargain.
Zacks puts Nike’s forward P/E at around 23.4 times earnings, compared with roughly 13 times for its industry.
That means investors are still paying a premium for the Nike brand despite the company’s weak growth outlook.
The bullish argument is that Nike’s earnings are temporarily depressed and could recover sharply if management gets the business back on track.
The bearish argument is that investors have been waiting for that recovery for years.
A low stock price only becomes a bargain if the underlying business can actually recover.
But there is still a bull case
Writing Nike off completely would be a mistake.
This is still one of the world’s most recognizable sports brands.
It has a massive global distribution network, a deep portfolio of athletes and sports franchises, and significant pricing power if it can rebuild consumer demand.
Retail investors clearly see that potential.
A recent Stocktwits poll found that 68% of respondents preferred Nike over Lululemon as a turnaround opportunity, compared with 32% for Lululemon.
The dividend is another reason some investors are willing to wait.
Nike currently pays about $1.64 per share annually, giving the stock a yield of more than 4% at its current price.
For long-term investors, that income can make the waiting period easier.
The market is still expecting a recovery
Wall Street has not completely abandoned Nike.
The average price target is around $50.66, which would represent roughly 30% upside from Monday’s close.
But there is an important warning sign here.
Nike closed below even JPMorgan’s reported $40 price target.
That tells you how quickly the market’s expectations have shifted.
The question is no longer whether Nike can bounce from these levels. The bigger question is what will actually trigger that bounce?
Investors need to see evidence of improving revenue, stronger demand, better digital performance and stabilization in China.
Without those things, a cheap-looking stock can remain cheap for a very long time.
Nike vs Lululemon: Two different comeback stories
Nike is not the only athletic brand under pressure.
Lululemon is also facing softer US demand, management changes and questions about its next phase of growth.
But the problems are different.
Lululemon’s first-quarter revenue still grew 4% to $2.5 billion, helped by 22% international growth. Nike, meanwhile, is trying to restart growth across a much larger and more mature global business.
For investors looking for a turnaround, that creates an interesting debate.
Nike offers scale, brand power and a large potential recovery.
Lululemon offers a different growth profile but has its own challenges.
The market will ultimately decide which company can execute better.
The biggest question for Nike investors
Nike’s stock has already suffered an enormous decline.
That creates an obvious temptation for investors to say, “How much lower can it go?”
But that may be the wrong question.
The better question is:
What would make Nike worth significantly more five years from now?
If Nike can restore sales growth, regain momentum in China, rebuild its product pipeline and make its wholesale strategy work, today’s depressed valuation could eventually look attractive.
If revenue remains stagnant and competitors continue taking market share, the stock’s decline may not be over.
The brand has survived strategic mistakes before.
Now investors need to see whether management can turn that brand strength back into real financial growth.
For now, the Nike comeback remains a story investors are betting on rather than one the numbers have fully confirmed.