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Wondering whether NIKE at a last close of US$41.88 is starting to look like value or still has more to fall is exactly the question this article is here to help you frame.
The stock has fallen 5.1% over the past week, 7.8% over the past month, and is down 33.8% year to date and 32.0% over the last year, with longer 3 and 5 year returns also in decline at 61.4% and 65.9% respectively.
These moves come as investors reassess the outlook for consumer discretionary spending and athletic apparel more broadly, with sentiment shifting across the sector. NIKE is part of that conversation, and recent coverage has focused on how the brand is positioned in a competitive global market and changing consumer habits.
On Simply Wall St’s valuation checks, NIKE currently has a value score of 1 out of 6. Next, this article will run through the standard valuation approaches used to assess the stock and then finish by looking at a more complete way to think about valuation that goes beyond a single score.
NIKE scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: NIKE Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes projected future cash flows and discounts them back to today using a required rate of return. The result is an estimate of what the company might be worth based on its own cash generation rather than current market sentiment.
For NIKE, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $. The latest twelve month free cash flow sits at about $1.04b. Analyst estimates and Simply Wall St extrapolations point to free cash flow of $3.91b by 2030, with detailed projections each year through 2035 guiding the calculation.
When all of those projected cash flows are discounted back to today, the model arrives at an estimated intrinsic value of $41.62 per share. Compared with the recent share price of $41.88, the DCF output suggests NIKE is about 0.6% above this estimate, which is effectively in line with the modelled value.
Result: ABOUT RIGHT
NIKE is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.
NKE Discounted Cash Flow as at May 2026
Approach 2: NIKE Price vs Earnings
For a profitable company, the P/E ratio is a useful way to think about value because it links what you pay per share to the earnings that support that price. Higher growth expectations or lower perceived risk often justify a higher P/E, while slower growth or higher risk usually align with a lower, more conservative P/E.
NIKE currently trades on a P/E of 27.6x. That sits above the Luxury industry average of about 21.5x and also above the peer group average of 25.7x. On the surface, that points to investors paying a premium for the stock compared with both the broader industry and direct peers.
Simply Wall St’s Fair Ratio for NIKE is 31.0x. This is a proprietary estimate of what the P/E might be given factors such as earnings growth, profit margins, industry, market cap and company specific risks. Because it blends these elements, it can be more informative than a simple comparison with industry or peer averages. Against this Fair Ratio, NIKE’s current P/E of 27.6x sits below the suggested level, indicating the stock screens as undervalued on this metric.
Result: UNDERVALUED
NYSE:NKE P/E Ratio as at May 2026
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Upgrade Your Decision Making: Choose your NIKE Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so this is where Narratives come in, a simple way for you to attach a clear story about NIKE’s future to the numbers you think are fair, link that story to revenue, earnings and margin assumptions, and then see a Fair Value that updates automatically on Simply Wall St’s Community page when fresh news or results arrive. You can then compare this with the current share price to frame investment decisions using real investor examples that currently range from a cautious Fair Value of about US$25.51 to more optimistic views around US$109.11.
For NIKE however, we will make it really easy for you with previews of two leading NIKE Narratives:
Each one connects a clear story about the business to specific revenue, margin and valuation assumptions, so you can see how different views line up against the current US$41.88 share price.
Fair Value: US$75.23 per share
Share price gap: about 44.3% below this fair value, using the narrative’s own assumptions
Revenue growth used: 4.0%
Sees direct to consumer as a double edged sword, with higher margin potential but more pressure on market share as retailers, outlets and fast fashion brands scale similar models.
Views product innovation as less defensible than many assume and sees Nike’s brand strength as the core asset, with competition and pricing pushing customers toward better price to performance options.
Builds a case around Nike retaining meaningful scale, normalizing input and freight costs and returning to an 11.5% net margin over time, with continued buybacks supporting earnings per share.
Fair Value: US$25.51 per share
Share price gap: about 39.5% above this fair value, based on the bearish analyst cohort’s assumptions
Revenue growth used: 0.6% decline
Highlights pressure from tariffs, supply chain shifts out of China and higher sourcing costs, with concerns that these could keep margins under strain for years.
Flags weaker consumer demand, slower China recovery and stiffer competition for younger buyers as potential drags on revenue momentum and pricing power.
Ties the cautious Fair Value to flat revenues, only modest margin improvement and a future P/E of 19.3x, well below the current multiple, with scope for further downside if sentiment stays weak.
Between these two narratives, you can see how different assumptions about brand strength, competitive intensity and margin resilience lead to very different Fair Values. If you want to go beyond the previews and see how the full range of community views connects long term growth, risks and valuation for NIKE, To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for NIKE on Simply Wall St. Add the company to your watchlist or portfolio so you’ll be alerted when the story evolves.
Do you think there’s more to the story for NIKE? Head over to our Community to see what others are saying!
NYSE:NKE 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NKE.
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