- Oops!Something went wrong.Please try again later.
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Nike (NKE) ten years ago? It may not have been easy to hold on to NKE for all that time, but if you did, how much would your investment be worth today?
Nike's Business In-Depth
With that in mind, let's take a look at Nike's main business drivers.
Headquartered in Beaverton, OR, NIKE Inc. was incorporated in 1967. The company is engaged in the business of designing, developing and marketing of athletic footwear, apparel, equipment and accessories, and services for men, women and children worldwide. With the help of a strong brand portfolio, including Nike Pro, Nike Golf, Nike+ and Air Jordan, it offers premium, well-designed and high-quality products, in line with the latest customer trends. NIKE is the global leader in athletic footwear, apparel, equipment and sports-related accessories, with operations in over 160 countries.
Nike’s “swoosh” logo and “just do it” tagline are widely recognized across the world, while its association with celebrity sportspersons, such as Michael Jordon and Roger Federer as well as top professional and college teams ensures a strong brand recall in the key U.S., U.K., Japanese and Chinese markets.
The company’s products include six key categories: running, NIKE basketball, the Jordan brand, football, training and sportswear (sports-inspired lifestyle products). It also offers products designed for kids, as well as for other athletic and recreational uses such as American football, baseball, cricket, lacrosse, skateboarding, tennis, volleyball, wrestling, walking and outdoor activities.
The company sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE owned retail stores, digital platforms (known as “NIKE Direct”), independent distributors, licensees, and sales representatives. With the help of its retail stores in the U.S. and abroad, Nike sells its products to more than 23,000 retail accounts in the U.S. and over 24,000 retail accounts outside the U.S. to reach a wide array of customers.
Nike currently reports its operating results under 2 segments, namely NIKE Brand segment and Converse. NIKE Brand is now divided into four divisions, primarily on a geographical basis: North America, Europe, Middle East and Africa (EMEA), Greater China, and Asia Pacific and Latin America (APLA).
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Nike ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $7,053, or a 605.30% gain, as of July 16, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 231.27% and gold's return of 10.23% over the same time frame.
Analysts are forecasting more upside for NKE too.
NIKE’s shares rallied significantly after it reported blowout fourth-quarter fiscal 2021 results and provided an upbeat view for fiscal 2022 and beyond. This led it to outpace the industry in the past three months. NIKE’s sales and earnings beat estimates and improved year over year in the reported quarter. Strong results can be attributed to the return of sports activity, reopening of stores, wholesale business strength and digital growth owing to permanent shifts toward digital and health & wellness. Also, strong customer connections through compelling brand experiences across NIKE Jordan and Converse, product innovation and expanding digital advantage have been key drivers. However, elevated SG&A expense as sporting events returned, partly hurt the results. A slowdown in Greater China due to ongoing boycotts have been headwinds.
The stock has jumped 25.42% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 10 higher, for fiscal 2021; the consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NIKE, Inc. (NKE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research