Down 11% in 2026: Is Nike Finally a Buy?

The iconic Nike (NYSE: NKE) has faced significant challenges over the past five years. The stock is down 11% so far in 2026, but overall has declined more than 50% since 2021. The brand is attempting a turnaround and return to athletic apparel glory, but it won't be easy or quick. The question for investors is: Should you buy Nike now? Let's explore the likelihood of the legendary athletic shoemaker's financial rebound.

A saturated and highly competitive sector

In the past five years, the S&P 500 has returned approximately 73%. Conversely, Nike, along with its largest competitors Adidas and Under Armour, struggled mightily. Adidas' stock in this same time frame has declined 51%, and Under Armour is down a staggering 65% as of March 10.

This decline across major athletic apparel brands speaks more to the struggles of the entire sector as it contends with inflation, tariffs, and greater supply chain disruptions. The industry has also struggled to innovate and compete with niche brands that target specific sports and specializations.

Nike's fundamentals are still strong

Nike is in the middle of its comeback, which internally is called "Win Now." The strategic plan began with a shake-up of senior leadership, announced back in December. The apparel brand is also restructuring its distribution approach and is moving away from its emphasis on direct-to-consumer sales. Because of this, Nike is now building its wholesale relationships with department stores and Amazon. It had previously cut ties with Amazon in 2019.

Nike is also refocusing on innovation and design to once again be an industry leader. The results of Win Now likely won't come to fruition for a few more quarters. However, Nike's moat remains intact, and its earnings aren't a disaster.

Image source: Getty Images.

In its last quarterly earnings release, Nike reported modest revenue growth of 1%. More importantly, the company's balance sheet is still strong with a manageable debt load compared to its cash, short-term investments, and accounts receivable.

Nike has also increased its dividend for 24 consecutive years now.

Is it a buy in 2026?

The stock's forward P/E ratio is just under 23, and its PEG ratio is 1.26, both of which suggest Nike is fairly priced at the moment. Since Elliott Hill returned as CEO in 2024, my belief that Nike can and will slowly right its ship has grown. Hill has more than three decades of experience within Nike and knows the business thoroughly.

It's not going to be a simple task, as economic pressures continue to weigh on the brand, and a saturated market means greater competition and lower consumer loyalty. Yet Nike has shown its relevance in sports culture time and again. It has the ability to hire the brightest minds and maintain its status as the premium athletic brand around the globe.

I think Nike will rebound over the next few years, and buying now will pay off for patient, long-term investors.

Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Under Armour. The Motley Fool has a disclosure policy.