Nike Stock for the Next 10 Years: Buy, Hold, or Avoid?

Nike (NYSE: NKE) stock is trading 75% from its previous peak, following weakening sales growth and margin pressure in recent years. At these lower prices, Nike's global brand recognition is likely undervalued, making the stock a solid hold, if not a buy, for the next decade.

However, investors will have to be patient. Nike has been dealing with weak demand for lifestyle products, such as sportswear and the Jordan brand, which account for roughly half of the company's revenue.

The recent spike in gas prices is not helping Nike's cause, likely contributing to the 1% year-over-year decrease in sales last quarter. But management is focusing on what it can control. Structural improvements to the supply chain and tighter inventory management put Nike on a path to earnings growth and stronger margins over the next 10 years, which may not be reflected in the current stock price.

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Nike's recovery has been slow, but it is taking shape

CEO Elliott Hill has called the turnaround progress "uneven" and noted that the business is not living up to its full potential. But that acknowledgment also hints at how cheap the stock could be right now. During the recent earnings call, Hill said management is building "Nike the right way, not for the next quarter, but for the next decade."

Nike's most fundamental competitive advantage is how it markets its brand through athletes, sports teams, and major events that grab attention. For example, Nike's various marketing campaigns received 1.5 billion views during the first week of the World Cup. This creates what management calls the "Nike multiplier" effect, which amplifies the brand and drives long-term demand. This is how Nike has grown into a business generating $46 billion in annual sales and leading the global footwear market.

Why the stock is worth holding

Nike's financials are weak right now. Revenue was flat in fiscal 2026 (which ended in May), while earnings were down 3% year over year to $2.10. But there is progress beneath the headline numbers.

Management is tightening inventory to better match supply with demand. This is driving higher full-price sales without the need to discount prices to clear excess inventory. Nike is also becoming faster and more precise in how it designs, manufactures, and distributes products to stores. These are structural improvements that will show up down the road in higher gross margin and earnings.

Nike's previous peak adjusted (non-GAAP) earnings per share was $3.95 in fiscal 2024. Compared to those peak earnings, the stock trades at a price-to-earnings multiple of 11, which is cheap. The problem is that it's uncertain how quickly earnings can recover. Analysts currently expect adjusted earnings to reach $2.75 by fiscal 2029.

Still, Nike might be rounding the corner right now. Revenue isn't growing but remains stable, and the operational improvements should put the business on track to resume earnings growth over the next year or so. I believe Nike stock is worth holding, and perhaps worth starting a new position in while it's deeply discounted.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.