Nike shares rise over 6% post-market as results beat expectations

Nike shares rise over 6% post-market as results beat expectations

Nike Inc. (NKE) shares experienced a significant post-market rally on June 19, 2025, after the company reported its fiscal Q4 earnings. The stock surged by over 6% following the release of the financial results, which exceeded analysts' expectations. The positive reaction from investors underscores the market's optimism about Nike's turnaround efforts and the potential for future growth.

In the latest quarter, Nike reported a 12% decline in revenue, which was less severe than the 16% drop expected by analysts [1]. The company's net income also surpassed estimates, although it still faced a year-over-year decrease of 32% [1]. This performance reflects the company's ongoing challenges, including the shift towards niche brands, geopolitical tensions, and operational complexities [1].

Nike's CEO, Elliot Hill, emphasized the company's progress in implementing its turnaround strategy, focusing on rebuilding wholesale partnerships, investing in new tech-driven products, and reducing costs. The company has also made strides in addressing inventory issues, with inventory levels falling by 2% year-over-year in the last quarter [1].

Despite the encouraging signs, investors remain cautious about Nike's long-term prospects. The stock's valuation remains below its peers, with a free cash flow yield of 5.7% compared to the U.S. 10-year Treasury yield of 4.4% and a cost of capital of 8% to 9% [1]. The company's stock trades at 15x cash flows, significantly lower than its traditional peers and newer competitors [1].

Analysts have a moderate buy consensus rating for Nike, with an average stock price target of $71.41, implying a 16% upside potential over the next twelve months [2]. However, the market's patience is running thin, and the company is expected to face continued scrutiny as it works towards a full turnaround.

In summary, Nike's post-market rally reflects investors' optimism about the company's turnaround efforts and its ability to beat expectations. However, the stock's valuation remains below its peers, and investors should continue to monitor the company's progress and challenges as it navigates its turnaround strategy.

References:
[1] https://finance.yahoo.com/news/nike-stock-nke-hits-6-014500752.html
[2] https://stockanalysis.com/stocks/nke/