NIKE, Inc. (NYSE:NKE) launched Caitlin Clark’s signature collection worldwide on October 1, the same day it reported earnings. After falling more than 40% this year, the stock now raises a bigger question: does it finally offer value? The latest earnings report offers another angle on how investors are viewing the stock.
What Caitlin Clark Can’t Change?
The new line features the Caitlin 1 shoe, a “CC” logo, and apparel, with with an 18-piece apparel collection alongside the Caitlin 1, which retails for $140 for adults, with kids’ versions priced at $105 to $115. Clark is credited with boosting the WNBA’s attendance and TV ratings, giving the launch meaningful buzz.
But the earnings backdrop is less encouraging. EPS came in at $0.48, above the $0.43 estimate, but revenue declined 4%. For the full fiscal year, NIKE expects revenue to decline by a high single-digit percentage and adjusted EPS to come in between $1.15 and $1.35. Against weakness in Sportswear and China, the signature line remains a small piece of the bigger picture.
Cheaper Than Before, Not Yet Cheap
Nike trades at a forward P/E of about 21.0x roughly 28% below its recent historical average of 32.97x. That gives investors a much lower price per dollar of profit than in the past year. The lower multiple likely reflects the weaker outlook, with EPS forecast to drop 14.38% this fiscal year before recovering.
At 23.73x, the stock is not cheap for a company with shrinking profits. As earnings decline, the effective valuation can become more expensive. At the same time, the current price already appears to factor in a recovery. EPS is expected to grow 31.39% in fiscal 2028 and 34.73% in fiscal 2029. The stock looks attractive only if it delivers those growth estimates.
I see Nike as fairly priced rather than attractively valued. A lower P/E alone does not create value when profits are still shrinking. For the stock to look like a true value opportunity, earnings need to show signs of a turnaround. Its valuation may look cheaper on paper, but the company’s earnings outlook remains key to the debate.
Hedge fund ownership of Nike slipped from 71 funds at the end of Q1 2026 to 56 funds at the end of Q2 2026. Short interest also remained high at 8.98% of float as of September 15, 2026.
Nike still has star power and trades at a lower valuation than usual. However, the decline in hedge fund ownership, sizable short interest, and weaker guidance suggest investors want to see the recovery take hold before buying.
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