Nike (NKE) outperformed the stock market: This is what it’s all about

Nike (NKE) closed the last trading day at $80.64, up 1.05% from the previous trading session. The stock outperformed the S&P 500's 0.03% daily gain. The Dow lost 0.04%, while the tech-heavy Nasdaq gained 0.2%.

Heading into today, shares of the sportswear maker had lost 4.18% over the past month, lagging the Consumer Discretionary sector's gain of 2.35% and the S&P 500's gain of 1.54% in that time.

Market participants will be closely following Nike's financial results in the upcoming release. The company plans to announce its earnings on October 1, 2024. In this report, analysts expect Nike to report earnings of $0.52 per share. This would represent a year-over-year decline of 44.68%. The latest consensus estimate, meanwhile, is for revenue of $11.64 billion, a decrease of 10% from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.06 per share and revenue of $48.65 billion, representing year-over-year changes of -22.53% and -5.28%, respectively.

It is also important to note recent changes in analyst estimates for Nike. These recent adjustments often reflect changing dynamics in near-term business patterns. As a result, optimistic estimate changes suggest that analysts have become positive about the company's business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we have developed the Zacks Rank, a proprietary model that takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a remarkable track record backed by third-party audits. Stocks ranked #1 have delivered an average annual return of +25% since 1988. Over the past 30 days, the Zacks Consensus Estimate for earnings per share has moved 0.88% lower. Currently, Nike has a Zacks Rank of #4 (Sell).

In terms of valuation, Nike is currently trading at a P/E ratio of 26.08, which represents a premium to the industry's average P/E ratio of 16.33.

Meanwhile, NKE's PEG ratio currently stands at 2.12. The PEG ratio is similar to the commonly used P/E ratio, but this parameter also includes the company's expected earnings growth curve. The Footwear and Retail Apparel industry had an average PEG ratio of 1.77 as of yesterday's close.

The Footwear and Apparel industry is part of the Consumer Goods sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 42% of all 250+ industries.

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The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Don't forget to rely on Zacks.com in the following trading sessions to keep track of all these and other metrics that affect the stock.

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