Nike Stock Continues to Fall, Is NKE Starting to Be Undervalued?

The pressure on Nike shares is not over. On tradingAugust 17, 2026,NKE stock price closed around US$39.09 after falling more than 4% in a day.

The stock touched US$38.86, the lowest intraday level in approximately 12 years.

Condition Nike stock falling increasingly attracting attention because the stock price is now almost 78% below the record US$177.51 reached in November 2021.

The latest decline also comes as investors continue to question the pace of Nike's turnaround under CEO Elliott Hill.

Prices that have fallen significantly certainly look tempting for value investors.

However, is itNike shares down to the point where it is really cheap, or the market is discounting fundamental unresolved issues?

Key Takeaways

• NKE stock down more than 4% on August 17 and touched a low of around12 years, pressure from the sportswear sector and concerns about Nike's turnaround.

• Nike's fiscal 2026 revenue was US$46.4 billion, relatively flat on a reported basis, while NIKE Direct fell 6% and its digital business fell 12%.

• NKE's valuation is indeed below its historical average, but earnings and sales growth still need to recover for the stock to be considered fundamentally undervalued.

Why Did Nike Stock Plunge to a 12-Year Low?

The last decline was not due to one factor.

Investing.com notesNKE stock falling todayaround 4.1% after a disappointing earnings report and outlook fromOn Holding's rivals are raising concerns about demand for the premium footwear industry as a whole.

Nike's own sentiment is also not strong.

JPMorgan downgraded NKE to Underweight in early August and cut its price target from US$47 to US$40, citing concerns that the impact of its “Win ​​Now” turnaround strategy on profitability could be longer-lasting than market expectations.

With the stock priced around US$39, the US$40 target suggests JPMorgan doesn't see significant upside room in its conservative scenario.

Nike's Turnaround Isn't Yet Fully Reflected in Earnings

Nike did show some improvements in fiscal 2026.

Full-year revenue reached US$46.4 billion, relatively flat compared to the previous year after a 10% decline in FY2025.

The problem is, some major channels are still under pressure.

NIKE Direct revenue for FY 2026 fell 6% to US$17.7 billion, primarily due to a 12% decline in NIKE Brand Digital and a 4% decline in Nike-owned stores. Converse also saw a 31% decline in revenue.

Greater China and EMEA also remain sources of pressure, although North America is starting to show growth.

This condition explains why investors are not yet fully convinced that the turnaround has entered a consistent growth phase.

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Margins Improve, but There's a One-Time Factor

At first glance, the fourth-quarter report looks very strong. Gross margin jumped to 49.2% and net profit reached US$1.1 billion, a 407% year-over-year increase.

However, the figure received a major boost from the IEEPA tariff recovery of approximately US$986 million.

Nike said these factors increased quarterly gross margin by approximately 900 basis points and provided a gain of approximately US$0.52 against fourth-quarter EPS of US$0.72.

This means that investors need to separate ongoing operational improvements from the profits they generate.its non-repetitive nature when assessing whetherNike stock drops too far.

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Is NKE's Valuation Cheap?

This is where the argument that Nike is undervalued becomes interesting.

Valuation data shows NKE's P/E ratio is around 25.9 times, about 24% below   10-year P/E is around 34.2 times.

From a historical perspective, the market has indeed placed a much lower valuation on Nike than it has for most of the past decade.

The stock price is also nearly half of its 52-week high of US$80.17.

But cheap compared to history does not automatically mean undervalued.

If Nike's earnings continue to be under pressure or sales recovery takes longer, the lower P/E could reflect a decline in growth quality.

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What Could Make NKE Stock Recover?

The biggest catalyst is the success of its "Win Now" strategy in generating real growth. Nike needs to demonstrate that new product innovation can increase sales, especially without relying too heavily on discounts.

Direct and digital business improvements are also crucial, as both channels are still experiencing contraction. Greater China is another area to monitor after experiencing pressure for several quarters.

On the positive side, Nike's FY2026 wholesale revenue grew 6% to US$27.5 billion.

Inventories are also relatively stable at around US$7.5 billion, so inventory issues do not appear to worsen significantly by the end of the fiscal year.

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So, Is Nike Stock Undervalued?

Source: Google Finance

At around US$39,NKE shares fell to a level that is historically much cheaper than the last few years.

The discounted valuation, Nike's brand strength, its US$9 billion cash position and short-term investments, and the potential for business recovery make this stock attractive to monitor.

However, undervalued requires more than just a falling price chart.

The risks of declining digital sales, weakness in Greater China, restructuring, margin pressure, and intense competition from brands like On, Hoka, and Adidas still make the turnaround uncertain.

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Conclusion

Nike condition of stock down currently it can be said to offer a valuation that's more attractive historically, but not yet a risk-free undervaluation case. 

The most important confirmation will come when revenue and profit growth begin to recover without relying on disposable factors.

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FAQ

Why are Nike shares down?

The latest decline was triggered by a combination of concerns about demand in the sportswear industry, the JPMorgan downgrade, and doubts about the speed of Nike's turnaround. On August 17, 2026, NKE fell more than 4%.

What is the latest Nike stock price?

NKE is closed around US$39.09 on August 17, 2026 and managed to touch US$38.86 intraday.

Is Nike stock undervalued?

The valuation is lower than historical averages, with a P/E of around 25.9 times compared to a 10-year average of around 34.2 times. However, the undervalued status remains dependent on Nike's ability to recover its earnings and revenue.

What is the biggest risk to NKE stock?

Key risks include weak Nike Direct and digital sales, pressure in Greater China, increasing competition, and the possibility that the turnaround will take longer than expected.

What could be a catalyst for Nike's stock rise?

Sales recovery, successful product innovation, digital channel regrowth, Greater China recovery, and healthier margins without the aid of single-use items could be important catalysts.