Nike Stock Overview

Zacks Rank #5 (Strong Sell) stock Nike Inc (NKE), incorporated in 1967, is the world’s largest athletic footwear, apparel, and equipment company. The $116 billion company has a robust brand portfolio that includes Nike Pro, Nike Golf, Nike+, and Air Jordan. Nike is well known for its unique and creative marketing campaigns and its iconic “swoosh” logo.

Though Nike is the best-known brand in its industry, its fundamental and technical performance has been lackluster over the past two years. While the stock market is forward-looking and discounts the future, Nike faces a slew of challenges, and the company’s ability to dominate the future the way it has in the past, looks unlikely (at least for now).

Nike Faces New Competition from Hoka and On Cloud

Nike faces formidable competition for the first time in years from relative newcomers like On Cloud and Hoka shoes:

On Holding (ONON), is a Swiss-based, high-end shoe manufacturer created by a former Swiss Ironman champion. Hoka One One, or Hoka, is another top-shelf running shoe manufacturer that was acquired by Deckers Brands (DECK).

In 2019, Nike had 23.4% market share in the athletic footwear industry, while On Running had a measly 0.3%. However, by 2022, On Running enjoyed a 1.2% market share, while Nike dropped to a 22.1% share. Similar, albeit smaller, trends have emerged with Hoka as well.

Though Nike’s dominance in the athletic footwear market is not in jeopardy, Wall Street is a game of “What have you done for me lately?” While Nike may dominate from a market share perspective, new and innovative competition is slowly eating away at the company’s growth.

Growth is Slowing at Nike

Zacks Consensus Estimates suggest that Nike’s earnings growth will slide by ~30% in 2025.

Image Source: Zacks Investment Research

Relative Weakness for NKE Shares

Though Nike has delivered positive earnings surprises in four straight quarters, the stock has continued to lag, signaling that investors are jumping ship. Over the past year, NKE shares have been down 26%, while the S&P 500 Index has been up 33%.

Image Source: Zacks Investment Research

Nike: The Future is Uncertain

Nike raised eyebrows when the company withdrew guidance for 2025 (never a positive sign). Meanwhile, NKE has a negative Zacks Earnings Surprise Prediction (ESP) score, which suggests it is likely to miss Wall Street estimates when it reports earnings in December.

Bottom Line

Nike is the dominant player in the athletic footwear industry. However, new competition, slowing growth, and relative weakness threaten the company’s dominance.

More By This Author: