Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.6 |
| P/S | 9.4 |
| EV/EBITDA | 1.9 |
| Fwd P/E | 5.5 |
| PEG | 5.2 |
| Analyst target | 9.0 |
- ▸Forward P/E: 23.1x
- ▸PEG: 1.46
NKE · Why this verdict
Why Nike (NKE) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Nike has delivered four consecutive quarterly earnings beats with an average surprise of 40%, while trading 21% below analyst consensus targets, but concentrated supply chain exposure in Vietnam and an elevated put-to-call ratio of 3.46 present material risks heading into near-term earnings.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Nike has beaten analyst earnings estimates in all 4 of the last 4 quarters with an average positive surprise of over 40%, indicating the company is consistently outperforming reduced expectations during its restructuring period. Earnings | Nike maintains its earnings beat streak through at least 2 more quarterly reports, sustaining positive EPS surprises above 10%. | →Stable |
| CounterThe recent beat streak coincides with a period of aggressive cost cutting rather than revenue growth, so beats may evaporate once restructuring benefits are fully realized. | ||
Over half of Nike's footwear is manufactured in Vietnam, and 59% comes from just four contract manufacturers, creating concentrated exposure to tariff, labor, and geopolitical disruptions that could compress margins rapidly. Bear case | Nike diversifies its top-4 manufacturer concentration below 50% or announces a formal supplier diversification plan within 12 months. | →Stable |
| CounterVietnam concentration reflects decades of optimized cost efficiency, and near-term tariff risks may already be priced in given the stock's significant decline from highs. | ||
Analysts have a consensus price target roughly 21% above the current price of $45.20, suggesting the market has discounted the stock below where informed coverage believes fair value lies. Sentiment | The stock price rises above $54 within 12 months, closing at least half the gap to analyst consensus target. | →Stable |
| CounterAnalysts have been revising targets downward, with 2 soft downgrades recently, and the stock remains below its 200-day moving average with a confirmed downtrend. | ||
A put-to-call ratio of 3.46 indicates that options market participants are buying substantially more downside protection than upside calls, reflecting broad institutional concern about near-term risk into the upcoming earnings. Options | The put-to-call ratio falls below 2.0 within 3 months as sentiment stabilizes following the earnings event. | →Stable |
| CounterElevated put-to-call ratios can act as a contrarian signal, as extreme bearish positioning sometimes precedes short-covering rallies when bad news fails to materialize. | ||
Nike has beaten analyst earnings estimates in all 4 of the last 4 quarters with an average positive surprise of over 40%, indicating the company is consistently outperforming reduced expectations during its restructuring period.
→StableEarnings
- Expectation
- Nike maintains its earnings beat streak through at least 2 more quarterly reports, sustaining positive EPS surprises above 10%.
CounterThe recent beat streak coincides with a period of aggressive cost cutting rather than revenue growth, so beats may evaporate once restructuring benefits are fully realized.
Over half of Nike's footwear is manufactured in Vietnam, and 59% comes from just four contract manufacturers, creating concentrated exposure to tariff, labor, and geopolitical disruptions that could compress margins rapidly.
→StableBear case
- Expectation
- Nike diversifies its top-4 manufacturer concentration below 50% or announces a formal supplier diversification plan within 12 months.
CounterVietnam concentration reflects decades of optimized cost efficiency, and near-term tariff risks may already be priced in given the stock's significant decline from highs.
Analysts have a consensus price target roughly 21% above the current price of $45.20, suggesting the market has discounted the stock below where informed coverage believes fair value lies.
→StableSentiment
- Expectation
- The stock price rises above $54 within 12 months, closing at least half the gap to analyst consensus target.
CounterAnalysts have been revising targets downward, with 2 soft downgrades recently, and the stock remains below its 200-day moving average with a confirmed downtrend.
A put-to-call ratio of 3.46 indicates that options market participants are buying substantially more downside protection than upside calls, reflecting broad institutional concern about near-term risk into the upcoming earnings.
→StableOptions
- Expectation
- The put-to-call ratio falls below 2.0 within 3 months as sentiment stabilizes following the earnings event.
CounterElevated put-to-call ratios can act as a contrarian signal, as extreme bearish positioning sometimes precedes short-covering rallies when bad news fails to materialize.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.3 |
| ROA | 3.5 |
| Gross margin | 4.2 |
| Op margin | 2.8 |
| Net margin | 2.4 |
| Current ratio | 7.4 |
| FCF quality | 4.6 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 58% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
1.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.5 |
| EPS growth | 0.0 |
Momentum
1.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -7.4%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.3 |
| Analyst rating | 7.5 |
| Price target | 9.3 |
- ▸Analyst upside: 43%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $2,930,754 (0.005% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.5 |
| quality rank | 4.3 |
| growth rank | 1.4 |
Technical
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 10.0 |
| 52w position | 0.5 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 8.4 |
| volatility | 4.2 |
| put call | 7.3 |
| implied vol | 1.9 |
| max pain risk | 3.0 |
| beta | 6.5 |
| debt equity | 6.2 |
| news risk | 5.0 |
- ▸High IV: 69%
- ▸Above max pain $25
- ▸Concentration risks: 4 HIGH, 4 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 5 days
- ▸Dividend: 392.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:4.7>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:1.1<4.5
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:5d<=7d
Warning (0)
none
Reward-to-Risk
4.70
Upside
+31.4%
Downside
6.7%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 40, MACD bearish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:1.1<4.5, DEATH_CROSS:HARD_BLOCK, EARNINGS_PROXIMITY:5d<=7d) reinforce the read. Current asymmetry R:R is 4.70 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.3, Catalyst at 7.2, and Technical at 6.8; the weakest are Momentum at 1.1, Growth at 1.2, and Peer rank at 3.8. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 4.70 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Nike has beaten analyst earnings estimates in all 4 of the last 4 quarters with an average positive surprise of over 40%, indicating the company is consistently outperforming reduced expectations during its restructuring period.
Trip ifEarnings surprise falls below 0% in at least 1 of the next 2 quarterly reports.
- P2Over half of Nike's footwear is manufactured in Vietnam, and 59% comes from just four contract manufacturers, creating concentrated exposure to tariff, labor, and geopolitical disruptions that could compress margins rapidly.
Trip ifGross margin declines below 42% for 2 consecutive quarters due to supply chain cost pressure.
- P3Analysts have a consensus price target roughly 21% above the current price of $45.20, suggesting the market has discounted the stock below where informed coverage believes fair value lies.
Trip ifAnalyst consensus price target drops below $50 within 6 months.
- P4A put-to-call ratio of 3.46 indicates that options market participants are buying substantially more downside protection than upside calls, reflecting broad institutional concern about near-term risk into the upcoming earnings.
Trip ifPut-to-call ratio rises above 5.0 in the 2 weeks before the next earnings date.