NKE is a good company but faces negative growth and structural changes; investors need adjusted expectations and suitable valuation to avoid poor performance.

Nike did not achieve success this time. I want us to discuss Nike's numbers, guys, because they weren't impressive after the market closed yesterday.

Nike. These companies are suffering, and they are suffering mostly because of consumers who do not have surplus funds, not those who do, right?

After the break, we will talk about the latest results from Nike . Nike announced its earnings after the market closed yesterday, Lou, I think that's interesting. There are many lessons for investors, but the stock has fallen by about 81% from its highest level in just five years.

They reported that revenue fell by 4% in the last quarter, but imagine, revenue is expected to fall by nearly 10% for this fiscal year. It seems that nothing is going well for Nike at the moment.

No, some of these mistakes are their own doing, and some are beyond their control. I mean, there are two sides to this story. First, they made a terrible mistake. They said we no longer need retail trade.

We will only sell directly to the consumer. They burned a lot of bridges with very important partners and this is still haunting them. But also, I don't know if it will make a difference anyway.

The world has changed. You only need one good Instagram influencer to launch a brand. It's not the same as it was in the 1980s when Nike could just pump money into big stars and dominate.

There are now trillions of brands and you will never get that market share. I don't think Nike will ever go back to being the old Nike. I think if investors want to look here, they need to readjust their expectations.

The company is still huge, it's still a good brand, and it will continue to exist. Things will never be the same again, and with each passing quarter, the blows continue.

The company is still huge, it's still a good brand, and it will continue to exist. Things will never be the same again , and with each passing quarter, the blows continue.

Yes, this is still an exceptional and amazing company. As investors, it's easy to cling to the idea that the stock has dropped by 80% and declare that this company is failing. It's still a great company, but everything is different now than it was 10, 15 or 20 years ago.

Western markets are very mature. You know, if you go back in time , people didn't wear sneakers in the same places they wear them now. Therefore, that cake has grown to its maximum possible size.

That's growth that's in line with GDP now , isn't it? Therefore , anyone who grows faster than the market is simply taking a share from someone else. This means that Nike has been playing a defensive role in its main markets for many years already.

So, if you put these two things together, investors really should have the right expectations about a company like Nike. I do n't know if those predictions were largely consistent four or five years ago, or three years ago, or in 2024 when everything peaked and the valuation also peaked.

As a rule-breaker, don't misunderstand me. I am very happy to pay a high rating for a company that everyone thinks is grossly overpriced. But there needs to be a huge opportunity on the other side, and that's not the case for Nike's business at the moment.

So, be aware of that; It may be a perfectly good company , but you are at a stage where you have to pay a suitable valuation or you are headed for poor performance.

Jason, what are your thoughts on what we discussed earlier regarding consumers and where they spend their money, given that some are doing well and others are not? It seems that Nike is heading in a negative direction.

Let's start with the company we just talked about. It's Nike. Nike stock is currently trading at around $33 at the time of recording this episode. Its price was $35 at yesterday's closing.

Jason, in 2030, will Nike's stock be higher or lower than $35 per share? Higher, and I think it will be closer to $50.

So, Travis, what annual growth rate are you expecting? Around 1.18 or something like that here. Yes, expectations are low, but over the past five years the stock would have lost by a large margin.

I think it will be higher. I mean, even $50 I do n't think it will outperform the market. I think it will be higher, but it won't outperform the market. This is funny. I am a growth investor, but I am looking at a company with negative growth and a future P/E ratio that is still 23, and I would have chosen "less". I'm surprised that neither of you did that .

The reason I believe it will be higher - again, there is a difference between the starting point and the end point, and how you get there. I think things are going to be really volatile along the way, but I think it will reach a point where things normalize and have their edge.

Even if their profit margins continue to erode a little, that enormous power as a buyer is still there, isn't it? And they gain some influence from that. So, I think this will help.

That size is still useful, and I still believe it will remain a very profitable company .

I think investors' expectations will change a little along the way as well, and it will reach an acceptable balance where things will be fine. Add to that a 5% dividend payout, which seems very safe to me right now.

Yes, they're still making money, but you know, you could have said the same thing about Under Armour a few years ago where you would keep looking and saying, " Ah, that's great value."

" This is a great value." It continues to decline.