Nike (NKE) Suffers a Larger Drop Than the General Market: Key Insights

The upcoming earnings release of Nike will be of great interest to investors. In that report, analysts expect Nike to post earnings of $0.44 per share. This would mark a year-over-year decline of 10.2%. Alongside, our most recent consensus estimate is anticipating revenue of $11.46 billion, indicating a 2.18% downward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $1.74 per share and a revenue of $46.26 billion, demonstrating changes of +10.13% and -0.3%, respectively, from the preceding year.

Investors might also notice recent changes to analyst estimates for Nike. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 1.1% fall in the Zacks Consensus EPS estimate. Nike is holding a Zacks Rank of #4 (Sell) right now.

With respect to valuation, Nike is currently being traded at a Forward P/E ratio of 24.21. This denotes a premium relative to the industry average Forward P/E of 12.96.

One should further note that NKE currently holds a PEG ratio of 1.87. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Shoes and Retail Apparel was holding an average PEG ratio of 1.77 at yesterday's closing price.

The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 73, this industry ranks in the top 30% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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