why you should invest in nike stock

The following is a comprehensive analysis of investing in Nike stock, based on multidimensional data such as its financial performance, market position, innovation capability, industry prospects, and institutional ratings:

 1. Financial performance and growth potential

 1. Resilience of revenue and profit

• Fiscal Year 2024: Nike’s total revenue reached US$51.362 billion (1% increase after excluding the impact of exchange rates), net profit was US$5.7 billion (12% year-on-year). The increase in gross profit margin was due to cost control (such as decreased shipping fees) and pricing strategy optimization.
• Regional highlights: Greater China’s annual revenue grew by 8%, growing for seven consecutive quarters, highlighting the potential of the Asia-Pacific market; although the North American market is under short-term pressure, wholesale revenue has increased by 5% year-on-year.

 2. Short-term challenges and long-term strategies

• Fiscal Year 2025: Revenue fell 9.3% in the third quarter, and net profit fell 32.3%, mainly due to supply chain restructuring, tariff adjustments and increased promotional activities. The company expects revenue to decline in mid-single digits for the whole year of 2025, but emphasizes the “Win Now” strategy (such as accelerating product innovation and optimizing inventory).
• Direct sales channel adjustment: Although online revenue fell by 10% in the short term, the online compound growth rate from 2019 to 2024 reached 26%, indicating the long-term potential of digital transformation.

 2. Industry leadership and competitive advantages

 1. Market share and brand value

• World No. 1: Nike ranks first in the global sports shoes and clothing market with a market share of 15.8%, far surpassing Adidas (8.2%). Its brand value comes from iconic products (such as Air Jordan), top athlete endorsements (such as James, Williams) and the “Just Do It” cultural symbol.
• Technical barriers: Continue to invest in innovation, such as Air air cushion, Flyknit upper technology, and dynamic air systems (Dynamic Air), to form differentiated competitiveness.

 2. Match diversified products and demands

• Product matrix: covers professional sports (such as Zoom series), trendy culture (Dunk SB), environmental protection (sustainable materials) and smart wearable (Adapt self-lace shoes).
  
• Customized services: Improve personalized experience and enhance customer stickiness through “Nike By You” and AR technologies (such as Nike Fit).

 3. Opportunities for global market growth

 1. Industry expansion trends

• Market size: The global sports shoes and clothing market is expected to reach US$544 billion in 2028, with an annual compound growth rate of 6.6%. Drivers include health awareness improvement, sports and leisure trends and emerging market penetration.
• Regional potential: Greater China and the Asia-Pacific region are growing faster than Europe and the United States, and Nike has seized share through localization strategies (such as the Chinese New Year series).

 2. Supply Chain and Production Efficiency

• Flexible supply chain: The Express Lane plan will shorten the production cycle from 60 days to 20 days, improving the response speed to market demand.
• Cost optimization: Outsourcing production (96% concentrated in Asia) and 3D printing technology reduce unit costs, while applying automation technology to save material losses in Mexico factories.

 4. Differences between institutional ratings and valuations

 1. Analyst’s opinion

• Target price range: The average 12-month target price is $87, the highest is $120 (potential return 67%), and the lowest is $49 (risk warning).
  
  
• Rating differentiation: 23 institutions recommend “buy”, 19 companies “hold”, and 2 companies “sell”. The difference lies in the trade-off between short-term performance fluctuations (such as the decline in profits in 2025Q3) and long-term brand power.

 2. Key bullish logic

• New product cycle: Performance innovative products (such as basketball shoe series) launched in 2025 are expected to drive demand.
• Inventory improvement: As of Q3 2025, inventory fell by 2% year-on-year, and the improvement of supply chain efficiency eased the pressure of excess.

 V. Risks and Challenges

1. Short-term revenue pressure: revenue expectations for fiscal 2025 decline in mid-single digits, and markets in North America and Western Europe are slowly recovering.
2. Intensifying competition: Emerging brands (such as Lululemon) and local competitors (such as Anta China) pose a threat in the segment.
3. Online channels are weak: the decline in direct sales revenue needs to be improved through membership system optimization (such as Nike+) and AR experience.

 Conclusion: Long-term value and short-term timing

As the global leader in sports brands, Nike has long-term growth potential with its brand moat, technological innovation and emerging market layout. Despite the pressure on short-term financial data, strategic adjustments (such as supply chain optimization, product iteration) are expected to drive recovery. Investors need to weigh the following factors:

• Reasons for buying: industry growth dividends, brand irreplaceability, and resilience in Greater China.
•  Reasons for waiting: short-term performance fluctuations and intensifying competition.

It is recommended to pay attention to the feedback of the new product market in 2025 and the signal of improvement in gross profit margin in the second half of the year, and combine it with the target price range to hold it for a long time to share the industry’s leading dividends.