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S&P 500   3,957.63
DOW   33,852.53
QQQ   280.57
Three Reasons It’s Time To Get Bullish On Organigram
Want To Catch The Next Hot Investing Trend (Look Inside?) (Ad)
The AP Interview: IMF head urges China to end mass lockdowns
Survivor of Virginia Walmart mass shooting files $50M suit
183 Pounds of Copper for Just ONE EV (Ad)
Can I Apply for Supplemental Security Income Online?
US stocks edge lower in unsteady trading, oil prices rise
U.S. and China Locked in an all-out Resource War! (Ad)
Why Investors Are Eating Up Restaurant Brands International
Opportunity Strikes! Hibbett, Inc Falls Flat On Strong Results
S&P 500   3,957.63
DOW   33,852.53
QQQ   280.57
Three Reasons It’s Time To Get Bullish On Organigram
Want To Catch The Next Hot Investing Trend (Look Inside?) (Ad)
The AP Interview: IMF head urges China to end mass lockdowns
Survivor of Virginia Walmart mass shooting files $50M suit
183 Pounds of Copper for Just ONE EV (Ad)
Can I Apply for Supplemental Security Income Online?
US stocks edge lower in unsteady trading, oil prices rise
U.S. and China Locked in an all-out Resource War! (Ad)
Why Investors Are Eating Up Restaurant Brands International
Opportunity Strikes! Hibbett, Inc Falls Flat On Strong Results
S&P 500   3,957.63
DOW   33,852.53
QQQ   280.57
Three Reasons It’s Time To Get Bullish On Organigram
Want To Catch The Next Hot Investing Trend (Look Inside?) (Ad)
The AP Interview: IMF head urges China to end mass lockdowns
Survivor of Virginia Walmart mass shooting files $50M suit
183 Pounds of Copper for Just ONE EV (Ad)
Can I Apply for Supplemental Security Income Online?
US stocks edge lower in unsteady trading, oil prices rise
U.S. and China Locked in an all-out Resource War! (Ad)
Why Investors Are Eating Up Restaurant Brands International
Opportunity Strikes! Hibbett, Inc Falls Flat On Strong Results

Could Nike Stock be Oversold, but Still Overvalued?

Could Nike Stock be Oversold, but Still Overvalued?

Nike (NYSE: NKE) stock is approaching its 52-week low made in July. That’s presenting an interesting dilemma for investors. On the one hand, if the stock holds the July lows as a support level, a technical case can be made that NKE stock is oversold. 

On the other hand, a weakening economy backed up by slowing earnings and revenue growth suggest that there may not be room in consumer’s holiday budgets for the company’s premium footwear and athletic gear. That would suggest that NKE stock could still be overvalued.  

Could the answer be both? And if it is what are investors to do about NKE stock? Those are the questions we’ll be looking at in this article. 

Will Nike’s Nod to Authenticity Work? 

Since I’m not a sneakerhead, Ben Schott’s article for Bloomberg was news to me. Specifically, that Nike has launched its NikeCraft x Tom Sachs General Purpose Shoe. The iconic company’s message was:  

“Your sneakers shouldn’t be the most exciting thing about you. They are tools, and what matters about your tools is that they work. They do their job so you can do yours. You put them on and forget about them.” 

And yet, those tools carry a hefty $109 price tag. But that could be considered a discount because with NIke it’s all about the swoosh. And these shoes still carry that cache.  

The success (or lack thereof) of this campaign may say a lot about the near-term direction of NKE stock. I recall back in the early 1990s, Cadillac tried to pitch a “downstream” sedan called the Catera to a younger market. But as an auto dealer told me the strategy backfired because the Catera attracted some of the older (and higher margin) buyers who paid cash for the Catera instead of buying the pricier legacy models. 


Could the same situation be on tap with Nike? I’m not sure. It seems to me the shoes could turn into collectibles. Or they could cannibalize from the company’s higher-priced offerings. Either way, I’m skeptical about their appeal as casual footwear for the everyman.  

The Fundamentals May Improve 

Ok, enough of the cynicism. Let’s get down to some numbers. The problem for Nike is that in the last two quarters, it has posted lower year-over-year revenue and earnings. Let me be clear. The company has beaten analysts’ estimates in both quarters, but the numbers are lower than the same quarter in the prior year.  

What does that mean? The answer to that question is why stock picking is as much art as it is science. As Matthew North wrote, Nike has an advantage in both margins and profitability. It leads me to believe that some of its total customer base is peeling off, but the die-hard brand loyalists continue to support the brand. 

And the company is expected to show high single-digit growth in revenue and double-digit growth in earnings over the next five years. But that could be pulled back if the company lowers its guidance.  

Should Investors Just Buy It? 

In a volatile market like this, Nike falls into an interesting category. It’s a company that has pricing power, but it’s products may not quite rise to that “gotta have it right now” level like Apple (NASDAQ:AAPL) and it’s iPhone.  

But then again, I’m not a sneakerhead. And that’s where I can allow myself to listen to a bullish argument. Because it’s always more important to pay more attention to what the consumer does (which is a lagging indicator) over what the consumer says (which is a leading indicator). 

NKE stock is getting down to an attractive level and although the dividend is not particularly impressive the company has been increasing it for 21 years.  

Should you invest $1,000 in NIKE right now?

Before you consider NIKE, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NIKE wasn't on the list.

While NIKE currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
NIKE (NKE)
2.6369 of 5 stars
$106.25+1.2%1.15%30.10Moderate Buy$115.25
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Chris Markoch

About Chris Markoch

Contributing Author: Retirement, Individual Investing

Chris Markoch is a freelance financial copywriter with over five years of experience covering various aspects of the financial markets. You may find his writing a little different than other stock articles you’ve read. And that’s OK with him. Chris doesn’t have a traditional finance background. What he does bring to the table is a strong business and marketing background having worked for agencies that serviced Fortune 500 companies. With that in mind, he isn’t overly impressed with what companies say, and more focused on what they do. And because buyer behavior dictates so much of what happens with a stock, Chris always keeps the end consumer close in mind. Chris has been writing for MarketBeat since 2018.

Contact Chris Markoch via email at CTMarkoch@msn.com.