Nike Is Down 43%. The Model Still Isn't Calling It Cheap.
As of April 16, 2026
Nike closed at $45.70 on April 16, 2026 — 43% below its 52-week high, with a 3.6% dividend yield and analysts projecting 36.5% upside from here. On the surface, it looks like a beaten-down blue chip waiting to be rediscovered. I ran it through the FactorForge scoring engine.
Six lenses. Six Fair verdicts.
How FactorForge scored Nike
FactorForge scores stocks across six independent investing frameworks: value, growth, quality, GARP (growth at a reasonable price), momentum, and a balanced composite. Each lens applies its own sector-calibrated thresholds and doesn't know what the others are doing. Verdicts — Cheap, Fair, or Expensive — reflect each lens's aggregate score, not a single metric. You can read more about how FactorForge scores stocks.
| Lens | Score | Verdict |
|---|---|---|
| Value | 0.19 | Fair |
| Growth | -0.06 | Fair |
| Quality | 0.05 | Fair |
| GARP | 0.02 | Fair |
| Momentum | -0.09 | Fair |
| Balanced | 0.16 | Fair |
Every lens agreed, all at High confidence. That kind of unanimity — even in the Fair direction — is worth examining.
The valuation problem: a high P/E on a shrinking business
The value lens has a straightforward job: find stocks where the price is low relative to what the business generates. On some measures, Nike looks reasonable. Price-to-sales is 1.5. Price-to-free-cash-flow is 20.7. For a consumer brand with a 42.7% gross margin, those aren't alarming numbers.
But the P/E ratio sits at 30.1 — flagged unfavorable by the model — on a company where earnings per share have declined 16.8% annualized over the past three years. A stock can fall a long way and still not be cheap if earnings are falling faster than the price.
That's the core tension in the value lens. The price has compressed. So have the margins, the revenue growth rate, and the earnings. The multiple hasn't compressed enough to offset the deterioration in what's being valued.
What the growth lens is measuring
Revenue growth came in at 0.1% — essentially flat. The three-year revenue acceleration trend is down 10.1 percentage points. EPS CAGR over the same period: -16.8%.
That last number is one of the newer signals in the FactorForge model, computed directly from Nike's SEC EDGAR filings. It measures the annualized growth rate of earnings per share over three years. A -16.8% reading doesn't mean Nike had one bad year. It means earnings have been compressing steadily.
The growth lens also scores earnings consistency — the volatility of year-over-year EPS growth, not just the direction. Nike's reading of 23.4% is moderate, which means the decline has been fairly steady rather than erratic. That's a consistent trend, not a one-time shock.
The Piotroski F-Score: what it's measuring and what Nike scored
The Piotroski F-Score is a nine-signal composite built entirely from a company's own financial statements. It was developed by University of Chicago accounting researcher Joseph Piotroski in 2000 as a way to separate improving businesses from deteriorating ones — regardless of what the stock price is doing.
Each of the nine signals is binary: a company either earns the point or it doesn't. The signals cover three categories: profitability (is the business generating returns?), leverage and liquidity (is the balance sheet getting stronger or weaker?), and operating efficiency (is the business getting more productive?). A score of 7–9 suggests a strengthening business. A score of 0–3 signals potential distress. The 4–6 range is neither.
Nike scored 4/9.
The model flagged this as unfavorable. It's not a distress signal — Nike isn't in the 0–3 zone. But it's a middle reading — below the range the model treats as a signal of genuine operational improvement. For a stock that many are framing as a turnaround opportunity, a 4/9 Piotroski score shows the fundamentals haven't yet confirmed that story.
Where Nike still looks solid
Not everything in the scorecard points the same direction. A few signals remain genuinely favorable.
Gross margin is 42.7% — well above what the model flags as favorable for the consumer sector — a mark of real pricing power and brand strength. Free cash flow margin is 7.1%, and cash earnings quality is 1.15, meaning Nike's reported earnings are backed by actual cash generation. Debt-to-equity is just 0.04. The financial structure is clean.
What the model is observing isn't that Nike is broken. It's that the current price still carries earnings assumptions the last three years of financial data don't support.
What the model doesn't capture
The model scores what has happened. It can't score what might happen next.
Nike brought in Elliott Hill as CEO in October 2024 — a Nike veteran tasked with rebuilding relationships with wholesale partners and reversing the direct-to-consumer overreach that contributed to the margin compression. None of that strategic repositioning shows up in trailing EDGAR data.
China remains an open question. Nike has significant exposure to the Chinese consumer market, and any recovery in that spending environment would flow through the income statement before the model could score it.
The brand itself isn't in any EDGAR filing. The Swoosh, the Jordan franchise, the athlete relationships — these have economic value that no ratio captures. The model measures what the business has produced, not what the brand could produce under different conditions.
What would change this rating?
The model's Fair verdict is built on current data. A few specific threshold changes would shift it.
The growth lens would move toward Cheap if EPS CAGR returned to positive territory and crossed the model's favorable threshold of 10% annualized — which would require a meaningful earnings recovery, not just a single better quarter. Revenue acceleration would need to reverse its three-year negative trend as well.
The value lens would move toward Cheap primarily through multiple compression. At the current earnings level, the P/E of 30.1 would need to fall considerably — either through a lower price or a recovery in earnings — before the model's valuation signals would turn favorable.
The quality lens would respond to margin stabilization. Profit margin is 4.8%, with a three-year trend of -2.9 percentage points. If operating margins recovered toward historical levels, several quality signals would flip.
None of those are predictions. They're descriptions of what the model is watching.
What the scorecard says
At $45.70, with a 43% drawdown from its 52-week high, a Piotroski F-Score of 4/9, a three-year EPS CAGR of -16.8%, and revenue growth at 0.1%, FactorForge scored Nike Fair across all six lenses on April 16, 2026. The gross margin and cash generation remain intact. The earnings trajectory and operating efficiency don't.
The model scores what has happened. Six lenses looked at Nike's recent financial history. None of them found a cheap stock.
All scores and metrics are generated by the FactorForge scoring engine as of April 16, 2026. FactorForge classifies NKE under Consumer Cyclical and applies sector-calibrated scoring thresholds accordingly. This is not financial advice. You are solely responsible for any investment decisions you make. Always consult a qualified financial advisor before acting on investment decisions. Do not rely solely on FactorForge for financial decisions.