Home / News /

Can Nike Stock Reach $100 in 2025?

1 week ago

Nike (NYSE: NKE) is proving that even some of the most dominant and well-known businesses can hit a rough patch. The S&P 500 is in record territory, but that's not the case for this stock.

Shares of the sportswear giant last traded in the three-figure club in March 2024, but they've been in a downward trend since. They currently sell at 58% below their peak from November 2021 (as of Dec. 30, 2024).

Can this consumer discretionary stock reverse course, rise 33% from its current $75 price tag, and get to $100 in 2025?

Nike controls 16.4% of the global sportswear market, according to data from Euromonitor. Adidas is in second place with a 9% share, showcasing Nike's commanding lead of the industry.

This kind of positioning doesn't happen overnight. Since its founding in 1964, Nike has risen up the ranks to become a household name with massive name recognition. The company's brand, supported by excellence in marketing and storytelling, has kept Nike relevant for decades.

Nike's brand has been a key contributor to its financial success. Revenue in fiscal 2024 (ended May 31) totaled $51.4 billion, 85% higher than in the same period 10 years earlier. Net income during this stretch soared 112%.

Thanks to consistent profitability, Nike has been able to return lots of capital to shareholders. The current dividend yield of 2.14% is certainly healthy. But it's worth pointing out that the payout has climbed 186% in the past decade.

Share buybacks are also critical. Nike repurchased $4.3 billion of outstanding stock in fiscal 2024.

Things haven't been going smoothly for Nike in recent years. With the benefit of hindsight, I believe there are two blunders that have led to the company's challenges.

The first was Nike's relentless push to boost its direct-to-consumer and digital sales. Not long after the onset of the COVID-19 pandemic, Nike's leadership team set a goal to achieve 50% of its revenue from the online channel. So, it decided to cut ties with key wholesale accounts.

After the pandemic's worst days had passed, consumer behavior normalized, and people went back to shopping in person. But Nike had bet that this wouldn't be the case. It gave up valuable shelf space to rivals, especially in the critical running category.

As a consumer brand, Nike must excel in product innovation, developing the right merchandise to drive interest. The company also has to ensure it doesn't create too much supply, which would undermine its brand image.

Here's the other area where Nike failed, as it relied too heavily on classic footwear lines that lost their cool factor due to excess supply. At the same time, the business hasn't prioritized releasing new styles and designs. "The result is we've become far too promotional," CEO Elliott Hill said on the second-quarter 2025 earnings call.

These negative trends led to 8% and 26% sales and net income drops, respectively, in Q2 2025 compared to the same year-ago period.

Nike shares have tanked an alarming 26% in the past five years. The market has completely soured on the company and its prospects. That pessimistic perspective is warranted.

However, the current valuation might be too hard to ignore. As of this writing, the stock trades at a price-to-earnings ratio of 23.1, representing a 42% discount to its trailing five-year average.

To turn things around, the business needs to stabilize its revenue and earnings declines, which will be helped by reducing promotional activity and focusing on product innovation. All this must happen while Nike wins back customers around the globe.

Even small progress can boost investor sentiment. If the stock rises 33% in the next 12 months, I would not be surprised. But to be clear, this depends solely on Nike's ability to improve its financial performance and reveal that it's a business heading in the right direction.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $348,216!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $47,425!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $480,681!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of December 30, 2024

Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.

Can Nike Stock Reach $100 in 2025? was originally published by The Motley Fool