Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.1 |
| P/S | 9.5 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 5.3 |
| PEG | 3.6 |
| Analyst target | 3.0 |
- ▸Forward P/E: 23.9x
- ▸PEG: 3.20
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. How we score · Editorial policy
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VerdictSELL
Overall score4.5/10
ConfidenceHIGH
MacroRISK_OFF
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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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.
↓DeterioratingBear 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.
↑ImprovingOptions
- 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
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.2 |
| ROA | 4.6 |
| Gross margin | 4.7 |
| Op margin | 3.2 |
| Net margin | 3.4 |
| Current ratio | 7.2 |
| FCF quality | 4.5 |
| Moat | 5.8 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 57% FCF/NI
Growth
1.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.4 |
| EPS growth | 1.6 |
- ▸Declining revenue: -4%
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.8 |
| MACD | 10.0 |
| OBV | 1.4 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Overbought bear rally (RSI 72)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -8.0%/30d — confirmed downtrend
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 4.3 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $771,333 (0.001% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 3.9 |
| growth rank | 1.1 |
Technical
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 0.3 |
| 52w position | 0.3 |
| gap | 5.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.6 |
| days to cover | 8.6 |
| volatility | 4.9 |
| put call | 5.2 |
| implied vol | 5.1 |
| max pain risk | 3.0 |
| beta | 6.6 |
| debt equity | 6.6 |
- ▸Above max pain $20
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 2.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- INSIDER:OK
- EARNINGS_PROXIMITY:49d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:4.0<4.5
- ASYMMETRY:-0.8=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
- 8K_SERIOUS:2.05
Warning (0)
none
Reward-to-Risk
-0.82
Upside
-12.3%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 72
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -49% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 2.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.0<4.5, ASYMMETRY:-0.8=NEGATIVE, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is -0.82 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Catalyst at 6.7, and Risk (lower is worse) at 5.6; the weakest are Growth at 1.5, Technical at 1.9, and Peer rank at 3.1. The V9 engine flagged 4 failed gates, producing an asymmetric reward-to-risk of -0.82 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.