Is NIKE, Inc. (NKE) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $39.88, NIKE, Inc. (NKE) sits above every lens we ran: our valuation lenses put the business somewhere between $32.89 and $38.87 per share. For a cyclical we value through the cycle we publish a range only (peer multiples and our researched mid-cycle DCF): where in the cycle the business sits decides where in that range it lands, and a single figure would claim we know that precisely. This is an educational model, not a price target or a recommendation.
The valuation discounts NIKE, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 9.9%, with a long-run terminal growth rate of 2.5%. About 77% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -1.0% annual revenue growth for NKE. Our base case instead compounds to about 1.6% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, NKE's modeled DCF value ranges from about $24.87 to $48.97 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what NIKE, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of NKE's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind NKE's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $46,398,000,000 | NIKE FY2026 10-K (accession 0000320187-26-000088, filed 2026-07-15): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2026 = $46,398M: flat reported, -2% currency-neutral, vs FY2025 $46,309M. Still 9.7% below the FY2024 peak of $51,362M. Mix inside the flat total is not flat: NIKE Brand wholesale +6% ($27.5B), NIKE Direct -6% ($17.7B, Digital -12%), Greater China -11% ($5.85B), Converse -31% ($1.17B), North America +5% ($20.5B). CROSS-CHECK, latest quarter: Q1 FY2027 (to 2026-08-31) revenue $11,213M, -4% reported / -5% currency-neutral, Greater China -26% cn; TTM through Q1 FY2027 = $45,891M. The base is left at the filed full year - the decline belongs in the forecast, where Year 1 carries it. |
| Base EBIT margin | 8.2% | NIKE FY2026 10-K (accession 0000320187-26-000088, filed 2026-07-15): OPERATING margin, derived: gross profit $19,911M - total selling & administrative expense $16,114M = $3,797M / $46,398M = 8.18%. Nike's own non-GAAP 'EBIT' is $3,850M (8.3%) because it also includes $53M of other (income), mostly FX remeasurement - excluded here as non-operating. TWO ITEMS INSIDE THIS NUMBER THAT A READER MUST KNOW: (1) Q4 cost of sales carries a ONE-TIME $986M benefit for the expected recovery of IEEPA tariffs after the Supreme Court's 2026-02-20 ruling, which the 10-K says 'largely offset[s] the impact of the IEEPA tariffs recognized during fiscal 2026' - so FY2026 is roughly a tariff-NEUTRAL year, which the future will not be; ex-recovery the margin is 6.06%. (2) $385M of employee severance (March 2026 cost realignment) depresses it; ex-severance and ex-recovery it is 6.89%. History for scale, same derivation: FY2019 12.2%, FY2021 15.6%, FY2022 14.3%, FY2023 11.5%, FY2024 12.3%, FY2025 8.0%. CROSS-CHECK Q1 FY2027: $4,798M - $3,910M = $888M / $11,213M = 7.92% (gross margin +60bp to 42.8% on lower warehousing/logistics; S&A -3%). This base figure does not drive the cash flows - the forecast margins do - but it is the 'peak' the site's cyclical test measures against. |
| Forecast revenue growth | -8% → 2% → 5% → 5% → 4% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. House input shared by every model in this tracker. |
| Beta | 1.11 | Yahoo Finance / yfinance published 5Y-monthly beta: Published 5Y-monthly beta 1.11, used AS PUBLISHED - no normalization. Considered and rejected: Nike's long-run beta was below 1 when it was a steady compounder, and a reader could argue for ~0.9-1.0 as the 'through-cycle' figure. But the last five years of monthly returns ARE the turnaround - a 13-year-low share price, two guidance cuts, a CEO and CFO change - and that risk is current, not historical noise. Each 0.1 of beta is worth roughly $2.2/share here; a 0.95 beta would give $36.49 (+$3.6). A beta of ~1.06 alone would match today's price. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP). Reasonable for Nike, whose revenue compounded ~5.9% FY2018-FY2024 and whose global athletic-footwear and apparel category has historically grown at or above GDP; it is NOT a call that Nike regains share. A 2.0% rate takes ~$1.7/share off ($31.20); ~2.75% would match today's price. Must remain well below the 9.95% WACC. |
| Diluted shares | 1,484M | NIKE Q1 FY2027 10-Q (accession 0000320187-26-000193, filed 2026-10-02): Q1 FY2027 weighted-average diluted shares 1,484.2M (basic 1,483.6M); FY2026 full-year diluted 1,481.0M. Rising slightly: buybacks under the $18B program have been PAUSED since Q1 FY2026 (no repurchases in Q1 FY27; $123M in all of FY2026), so SBC issuance is not being offset. Diluted count used so SBC dilution is captured. |
| Market price | $39.88 | Delayed quote · as of 2026-11-10 06:00 UTC |
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