Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.2 |
| P/S | 9.4 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 6.8 |
| PEG | 5.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 18.6x
- ▸PEG: 1.50
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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
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.
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.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.4 |
| ROA | 4.2 |
| Gross margin | 4.6 |
| Op margin | 4.8 |
| Net margin | 3.3 |
| Current ratio | 6.9 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
2.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.2 |
- ▸Declining revenue: -1%
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.5 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -7.4%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 7.5 |
| Price target | 7.7 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $2,930,754 (0.004% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 5.0 |
| growth rank | 1.4 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.6 |
| support resistance | 5.3 |
| 52w position | 1.0 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 8.1 |
| volatility | 3.6 |
| put call | 6.7 |
| implied vol | 6.1 |
| max pain risk | 3.0 |
| beta | 6.5 |
| debt equity | 6.5 |
| news risk | 5.0 |
- ▸Above max pain $25
- ▸Concentration risks: 4 HIGH, 4 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 372.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.35
- NEWS_BOOST:ANALYST_CLUSTER(4)
- EARNINGS_PROXIMITY:86d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.4<4.5
- ASYMMETRY:1.4<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.42
Upside
+10.1%
Downside
7.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 42
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -45% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:1.4<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.42 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.3, Sentiment at 7.1, and Value at 6.0; the weakest are Growth at 2.2, Technical at 4.0, and Peer rank at 4.2. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.42 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEarnings surprise falls below 0% in at least 1 of the next 2 quarterly reports.
- P2Supply Chain Vietnam Concentration
Trip ifGross margin declines below 42% for 2 consecutive quarters due to supply chain cost pressure.
- P3Analyst Upside Potential
Trip ifAnalyst consensus price target drops below $50 within 6 months.
- P4Elevated Put Call Bearish Hedging
Trip ifPut-to-call ratio rises above 5.0 in the 2 weeks before the next earnings date.