Curious to hear your take on Nike (NKE) after the pullback post-earnings. Do you see this as a potential buying opportunity, or are you waiting for further confirmation before moving in? Would love to hear how you're thinking about the valuation and long-term outlook here.
About Nike ($NKE): despite the brand and the recent drop of more than 50% from its ATH, I think we've seen some structural changes in the competitive market over the past few years. For example, distribution networks are no longer as relevant for maintaining above-capital returns > with the rise of the internet and e-commerce, many entrepreneurs are creating their own brands and distributing them without having their own network. The competitive market is getting tougher, and some barriers have fallen (see On Holding $ONON and many others).
Nike is at a 28x P/E for next year, with some significant internal restructuring challenges. Turnarounds are rarely easy or quick, quite the opposite.
At this multiple, there are higher-quality companies that are growing faster. Since capital is scarce, you can't have all the assets, so I prefer to watch from the sidelines (for now, until we get clearer confirmation of a recovery).
Curious to hear your take on Nike (NKE) after the pullback post-earnings. Do you see this as a potential buying opportunity, or are you waiting for further confirmation before moving in? Would love to hear how you're thinking about the valuation and long-term outlook here.
Hey, Silas! Good to see you here.
About Nike ($NKE): despite the brand and the recent drop of more than 50% from its ATH, I think we've seen some structural changes in the competitive market over the past few years. For example, distribution networks are no longer as relevant for maintaining above-capital returns > with the rise of the internet and e-commerce, many entrepreneurs are creating their own brands and distributing them without having their own network. The competitive market is getting tougher, and some barriers have fallen (see On Holding $ONON and many others).
Nike is at a 28x P/E for next year, with some significant internal restructuring challenges. Turnarounds are rarely easy or quick, quite the opposite.
At this multiple, there are higher-quality companies that are growing faster. Since capital is scarce, you can't have all the assets, so I prefer to watch from the sidelines (for now, until we get clearer confirmation of a recovery).
Thanks for the insights, Jimmy!