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Stock prices do not track revenue. They track what the market believes a company’s next dollar of revenue is worth.
When that belief changes, a company can grow its top line and still lose most of its market value.
And the markets made Nike… just do it.
Fiscal 2026 revenue: $46.4 billion, for the year ending 31 May 2026. Fiscal 2021 revenue, the last full fiscal year before the stock hit its all-time high in November 2021: $44.5 billion.
Revenue is higher today. But market capitalisation has fallen from roughly $264 billion to about $57 billion, a drop of approximately 78%.
Source: NKE on Vested
On 21 September 2026, Nike will be removed from the S&P 100 index after nearly 18 years as a member. The four companies replacing it are all in technology.
The numbers say Nike got bigger, while the market says it got worse. And the gap between those two truths is where the real story lives.
Nike: Just do it, S&P 100: Just not here
S&P Dow Jones Indices announced on 4 September 2026 that Nike would leave the S&P 100 before the US open on Monday, 21 September 2026. Nike was first added to this index in December 2008.
Nike is not leaving alone. Colgate-Palmolive, Simon Property Group and Honeywell Aerospace are all being removed in the same quarterly rebalance.
Their replacements: Dell Technologies, Palo Alto Networks, Arista Networks and SanDisk. All four from the IT sector: AI servers, AI security, AI networking, AI memory.
There is an irony here worth pausing on.
John Donahoe, Nike’s former CEO, was a technology executive who previously ran eBay and ServiceNow. He was hired in January 2020 to transform Nike into a digital-first company.
He launched the Consumer Direct Acceleration strategy, acquired data firms like Zodiac, Celect and Datalogue, and bet heavily on the Nike and SNKRS apps. That strategy is now widely cited as the reason Nike lost its way.
The companies replacing Nike in the S&P 100 are the kind of companies Donahoe wanted Nike to become.
A quick explainer. The S&P 100 is a subset of the S&P 500 that tracks the 100 largest US companies by market cap. Nike is only leaving the S&P 100. It remains in the S&P 500, the Dow Jones Industrial Average, and trades normally on the NYSE.
The money tracking the S&P 500 and the Dow is not forced to sell, because Nike stays in both. The only forced selling comes from S&P 100 trackers, and that pool is small.
The largest S&P 100 tracker, the iShares S&P 100 ETF (OEF), had about $20 billion in assets, with Nike making up roughly 0.15% of the fund. That is approximately $30 million worth of shares, in a stock that trades 17 to 20 million shares on an average day.
The removal carries more symbolic weight than the outflow itself.
And to understand how a company can have higher revenue than when it was worth $264 billion and still be worth only $57 billion, you have to look past the top line.
What changed?
Revenue actually peaked at $51.4 billion in fiscal 2024 (year ending May 2024). Then it fell sharply, dropping 10% to $46.3 billion in fiscal 2025 as the Donahoe-era D2C strategy unravelled and China sales collapsed.
Fiscal 2026 was essentially flat at $46.4 billion. Revenue has come down from its peak, but it still sits above the $44.5 billion Nike earned back in fiscal 2021.
The real damage happened to profitability. And the arithmetic behind the 78% stock decline is surprisingly clean.
| FY2021 (year ended May 2021) | FY2026 (year ended May 2026) | Change | |
| Revenue | $44.5 billion | $46.4 billion | +4% |
| Net income | $5.7 billion | $3.1 billion | -46% |
| Diluted EPS (reported) | $3.56 | $2.10 | -41% |
| Diluted EPS (underlying) | $3.56 | ~$1.58 (ex-tariff benefit) | -56% |
| Approx P/E | ~50x | ~24x | -52% |
| Market cap | ~$264 billion | ~$57 billion | -78% |
Source: Nike annual earnings releases
Underlying EPS fell roughly 56%, from $3.56 to about $1.58. The P/E multiple the market was willing to pay compressed from approximately 50x to about 24x.
When you see EPS fell 56%, it means Nike retained 44% of its peak earnings. The P/E fell 52%, meaning the market retained 48% of what it was willing to pay per dollar of those earnings.
0.44 × 0.48 = 0.21. Nike retained about 21% of its peak value. That matches the observed 78% decline almost exactly.
Earnings and sentiment did all the damage, roughly in equal measure.
Where did the profitability go, you ask?
Nike Direct revenues fell 6% in FY2026, with digital sales down 12%, a drop of roughly $1 billion in digital revenue compared to the year before.
Greater China revenue declined to $5.85 billion in FY2026, down from a peak of $8.29 billion in FY2021, a fall of roughly 29% over five years. For context, that is eight consecutive quarters of declining sales.
Converse collapsed 31% to $1.2 billion in revenue, with segment EBIT falling 93% to just $18 million.
Wholesale was the one area showing improvement, rising 6% to $27.5 billion as Nike rebuilt the retail relationships that the Donahoe-era D2C push had damaged.
Source: Nike FY2026 10-K (SEC EDGAR), annual earnings releases
In fact, the story of competition is widely popular.
Hoka and On Holding eating into running share. Anta and Li-Ning gaining ground in China.
Nike’s global sports-footwear market share reportedly fell to 22.9% in 2025, the third consecutive annual decline, according to Euromonitor International via Reuters.
But there is a less examined story about what Nike did with its own capital on the way down.
Buybacks gone wrong
Between fiscal 2021 and fiscal 2026, Nike spent approximately $17.6 billion buying back its own shares. Here is how that money was distributed:
| Fiscal year | Dollars spent | Shares retired | Implied average price per share |
| FY2021 | $650 million | ~4.9 million | ~$134 |
| FY2022 | $4.0 billion | ~27.3 million | ~$147 |
| FY2023 | $5.5 billion | ~50.0 million | ~$110 |
| FY2024 | $4.3 billion | ~41.4 million | ~$104 |
| FY2025 | $3.0 billion | ~37.6 million | ~$79 |
| FY2026 | $123 million | ~1.8 million | ~$68 |
| Total | ~$17.6 billion | ~163 million |
Source: Nike FY2026 10-K (SEC EDGAR), earnings releases
The pattern is hard to miss. Nike bought the most shares when they were expensive, paying between $147 and $155 per share on average during FY2022, around the November 2021 peak.
It bought almost nothing when shares were cheapest. Just $123 million in FY2026, with the stock near a 12-year low around $38.
The implied value gap is roughly $11 billion. The 163 million shares retired at a weighted average well above $100 would cost approximately $6.2 billion to repurchase at today’s price. The difference between what Nike paid and what those shares would cost now is larger than Nike’s entire underlying net income over the period.
(This is a derived figure representing implied opportunity cost, not a realised accounting loss.)
Massimo Giunco, who spent more than 25 years at Nike as a Senior Brand Director, put it bluntly in a widely circulated 2024 LinkedIn essay. He wrote that Nike made what amounted to “an impressive waste of money” across marketing, D2C strategy and capital allocation.
The buyback numbers, year by year, make the case in a single table.
Anyways, the question that actually matters for anyone considering Nike is not whether the stock has fallen enough. It is whether the business has stabilised enough that the fall is likely over.
Can Nike recover?
Let’s see what happened with Adidas for comparison.
In October 2022, Adidas terminated its Yeezy partnership with Kanye West, wrote off reportedly about $1.3 billion in inventory, and headed into its first annual loss in over 30 years. Bjorn Gulden became CEO in January 2023.
He rebuilt wholesale relationships, decentralised decision-making, leaned into the terrace-wear trend with the Samba and Gazelle, and cut underperforming lines.
The critical timing point: Adidas shares started recovering immediately when Gulden arrived, in early 2023, while the company was still heading into its worst-ever reported loss.
Source: ADDYY on Vested
The operational bottom came a full year later: a 5.6% operating margin in calendar 2024. By the time margins bottomed, the stock had already moved significantly higher.
By calendar year 2025, Adidas reported record revenue of roughly $26 billion (€24.8 billion), an operating margin of 8.3% and net income growth of 67%.
Source: Adidas group annual results release
Elliott Hill returned from retirement in October 2024, roughly the same point in the turnaround arc as Gulden in January 2023.
If Nike follows the Adidas pattern, the stock could bottom well before the income statement shows a clear recovery. That’s no hint, it’s just a story that has played out in the past.
But there is one important difference. Nike’s dividend may be running hotter than its earnings can support.
Nike pays $0.41 per quarter, or $1.64 per share annualised. At roughly $38, that is a yield of about 4.2%, the highest in the company’s history.
This is Nike’s 24th consecutive year of dividend increases. Against reported FY2026 EPS of $2.10, the payout ratio is a manageable 78%.
But against underlying EPS of approximately $1.58, stripping out the tariff benefit, it rises to about 104%. The dividend reportedly was not fully covered by free cash flow in FY2026 either: approximately $2.4 billion in dividends paid against roughly $2.18 billion of FCF.
Nike has $9 billion in cash on its balance sheet, so this is not a crisis. But a 25th consecutive annual increase later this year would stretch the payout further, and that is something income-focused investors should watch.
The bear case.
JPMorgan downgraded Nike to “Underweight” in August 2026 with a $40 price target, arguing earnings pressure could persist through fiscal 2028.
Nike’s footwear market share reportedly fell for a third consecutive year. Truist cut its rating to “Hold” with a $42 target.
The bull case.
Morningstar analyst David Swartz maintains a wide-moat rating and a $94 fair value estimate, arguing the current trading range heavily overdiscounts cyclical, fixable problems.
Nike Running reportedly delivered five consecutive quarters of double-digit growth. The Vomero 18 became a $100 million-plus franchise in its first 90 days.
Insiders are buying.
Hill purchased approximately $1 million in shares in late December 2025. Director Tim Cook reportedly increased his Nike stake by approximately 90% around the same time.
So, what to watch?
The first products from Nike’s Sport Offense model, which reorganised roughly 8,000 employees into vertical sport-based teams, are reportedly due across all sports in spring 2027.
Until then, three signals matter: full-price sell-through improving without heavy discounting, Greater China declines narrowing, and the Sportswear plus Jordan lifestyle categories stabilising.
Two of three turning positive could potentially be a stronger entry cue than the stock price alone.
What this means for you
Nike trades at approximately $38.40 as of 4 September 2026. The 52-week range is $37.95 to $76.97.
At underlying EPS of roughly $1.58, the stock trades at about 24x earnings. The dividend yield is approximately 4.2%.
The core question is whether you are looking at a five-year decline nearing its end, or a structural repricing with further to fall.
The Adidas template suggests the former. The China trajectory and the FCF gap suggest patience.
Key dates ahead. Nike’s fiscal Q1 2027 earnings are reportedly due on 1 October 2026. The company’s Investor Day on 16-17 November 2026 is expected to lay out long-term targets under the Sport Offense model.
Nike (NYQ: NKE) and the Vanguard S&P 500 ETF (VOO), which holds Nike among its constituents, are both available to Indian investors through global investing platforms like Vested.
Disclaimer: Past performance is not indicative of future returns. For educational purposes only. Nothing in this article is a recommendation. Consult your investment advisor before taking any investment decisions.
