My conclusions after researching Nike (NKE) during the week

I completely understand those who say that Nike has lost its touch and that brands like Hoka, On and Adidas have started to emerge more in America. there is truth in these arguments. But if we put aside the hunting sentiment for a moment and look at the numbers and the story behind them – the picture changes.

Over the past four years, Nike's share price has gradually fallen to a current low of $41.

To get a sense of the market's insanity: The stock is trading at a quarter of its 2021 peak price (which was around $170). The market has simply erased 75% of the value of the world's most powerful sports brand, while revenues have only fallen by about 10% from their peak.

Nike's previous CEO, John Donahue, tried to turn Nike into a technology and direct-to-consumer (DTC) company, cutting ties with major retailers, causing Nike to lose its innovative edge and connection with the running and athletic community. The stock fell, and the company lost market share to younger brands like On and Hoka. Elliot Hill was brought in in October 2024 as the company's "savior" after a very difficult period under John Donahue.

Since taking office, Hill has led a comprehensive turnaround strategy focused on three key axes:

1. A strong return to retail: He quickly reestablished relationships with large retail chains (like Foot Locker and others) that Donahue had abandoned, to put Nike shoes back on shelves everywhere. In my personal opinion, the renewed exposure to the "non-technological" public, such as the 40+ age group, will directly lead to an increase in revenue.

2. Operational diet and a fortified balance sheet: Nike is in the midst of a $2 billion cost-cutting drive. In a sleepy capital market, everyone looks at the top line (revenue) and yawns, but financial statements are not built to reflect revenue alone! In the new lean expense structure, any slight increase of one or two percent in sales (which could emerge as early as this summer thanks to the 2026 World Cup) is going to bounce EPS like a spring loaded.

We’re not talking about a dream stock or a tech company trading at a fantasy P/E and bleeding cash. Nike has one of the strongest balance sheets in the S&P 500 – mountains of cash, debt managed at historically low interest rates, and a dividend yield that, at a floor price of $42, has become a magnet for large institutions. They’re already picking it up under your radar.

3. Investing in innovations and rebuilding morale: As someone who started as an intern in 1988, Hill was a much-loved executive within Nike's corporate culture, and his appointment brought much of the brand's original energy and "DNA" back to employees. He redirected development budgets toward new designs and sports technology, rather than "recycling" existing models. This process takes time because shoe design and manufacturing cycles take months, but it will soon be reflected in stores.

The bottom line: The stock market is an emotional trend machine in the short term, and a value-scavenging machine in the long term. Buying a company with a strong economic moat (as Buffett says) at a 75% discount to its peak while its business fundamentals are being rebuilt is exactly what separates momentary gamblers from patient value investors.

So try to study Nike's reports, understand the numbers, and feel the potential for yourself.

I just drew your attention.

gavrik,