Key Points
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Nike does not require explosive growth to justify its current valuation.
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Wholesale revenues are recovering as the company mends retailer partnerships.
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China and digital channels present significant hurdles in the turnaround effort.
Nike (NYSE: NKE) has plummeted roughly 79% from its November 2021 peak of $179.10, currently trading near $37. This decline has pushed its dividend yield to approximately 4.4%, making it the highest-yielding stock in the Dow Jones Industrial Average. Despite being one of the most iconic consumer brands globally, the stock now trades at levels not seen in over a decade. Does this make it an obvious value? Not necessarily. Let me explain.
Nike generated $46.4 billion in revenue in fiscal 2026 and finished the year with $9 billion in cash, equivalents, and short-term investments. Yet the stock is trading at levels last seen more than a decade ago. So, is Nike finally an obvious value stock? Not quite. Let me explain.
Image source: Getty Images.
Nike has some problems
Nike’s fiscal 2026 revenue was essentially flat, while net income fell 3% to $3.1 billion, and earnings came in at $2.10 per share. Those numbers aren’t terrible. They’re just nowhere near what investors once expected from Nike.
The company’s direct-to-consumer strategy, Nike Direct, has also struggled. Revenue from Nike Direct fell 6% in fiscal 2026, while Nike Brand Digital sales dropped 12%.
China remains another major problem. Greater China revenue fell 12% in fiscal 2026, continuing a stretch of weakness in a market once considered one of Nike’s biggest long-term growth opportunities. Then there’s competition.
Nike spent years dominating athletic footwear, but companies such as On Holding (NYSE: ONON) and Deckers‘ (NYSE: DECK) Hoka brand have gained ground, particularly in running. Adidas has also become more competitive. Nike isn’t going anywhere. But the Swoosh isn’t quite the competitive moat it once appeared to be.
The turnaround is starting to show up
CEO Elliott Hill has been trying to repair some of the mistakes made under previous management, including Nike’s aggressive shift away from wholesale partners. That strategy was supposed to increase margins by selling more products directly to consumers. Instead, it weakened relationships with retailers and created opportunities for competitors to take valuable shelf space. Nike is now rebuilding those relationships.
Wholesale revenue increased 6% to $27.5 billion in fiscal 2026. Management has also been refocusing Nike on sports, product innovation, and performance footwear while rebalancing its product portfolio and reducing its previous reliance on Nike Direct and digital sales. If that continues, Nike won’t need spectacular growth to make today’s valuation work. It simply needs to start growing again.
That 4.5% dividend changes the equation
This is where Nike gets much more interesting. Nike currently pays a quarterly dividend of $0.41 per share, or $1.64 annually. At roughly $37 per share, that’s a yield of about 4.4%.
Nike has also increased its dividend for 24 consecutive years. That’s not something investors typically associate with Nike. For most of the past decade, investors bought the stock primarily for growth and accepted a relatively small dividend while they waited. Today, you’re getting paid considerably more to wait. The concern is whether Nike can comfortably continue increasing that dividend if earnings remain depressed.
With fiscal 2026 earnings per share of $2.10 and an annualized dividend of $1.64, Nike is now paying out close to 80% of earnings. That’s manageable for now, especially given the company’s balance sheet, but it leaves less room for error than it did several years ago. To be sure, a sustained earnings recovery would make that dividend much more attractive.
Cheap doesn’t automatically mean value
At roughly 17.5 times trailing earnings, Nike is substantially cheaper than it was during the pandemic-era boom. But 17.5 times earnings isn’t dirt cheap for a company whose profits aren’t growing.
Nike still needs to fix China, regain momentum in digital sales, defend its market share, rebuild its product pipeline, and prove its wholesale recovery can translate into stronger earnings. Until then, if you’re buying, you’re buying a turnaround. And that’s a lot different than buying a healthy company that the market has temporarily mispriced.
Is Nike an obvious buy?
I wouldn’t call it obvious. But I also wouldn’t dismiss Nike simply because the chart looks terrible.
This is still a company generating more than $46 billion in annual revenue. It has $9 billion in cash and short-term investments, is one of the world’s most valuable consumer brands, is improving wholesale sales, and has a dividend yield above 4%. And at 79% below its 2021 high, you’re certainly not paying for perfection.
I’d want to see evidence that earnings have bottomed before getting aggressive, though. Stabilization in China, improving Nike Direct sales, and another few quarters of wholesale growth would go a long way toward convincing me that the turnaround is real.
If those things happen while the stock remains around current levels, Nike could become a very compelling value stock. Until then, that 4.4% dividend gives you a pretty good reason to keep watching.