NKE is not a buy at $35: fiscal 2027 revenue is guided down upper single digits (7, 8, or 9%) with pressure into 2028, and operating income may fall 15 to 20%; fair value was cut to $26.60. He would buy only on better performance or near $25.

Nike informed Wall Street analysts in its latest conference call that its sales are likely to decline by mid- to upper single digits in the next fiscal year. In my opinion, this is the real reason behind the decline in Nike's stock after the company announced its quarterly financial results .

So, I wanted to delve deeper into this and answer whether I think this is a buying opportunity for investors or whether there is more suffering ahead for Nike before it can fully recover.

Here is the management team's statement for fiscal year 2027. They expect revenue to decline by a percentage in the upper single digits. This means negative growth of 7, 8 or 9% year-on-year for Nike in the next fiscal year.

This is for a company whose revenues were typically growing at a rate in the upper single digits. This is the opposite of what Nike was used to in the decades prior to 2019.

So, there is a great deal of disappointment in this disclosure for Nike stock investors , and in my opinion, this is the main reason behind the decline in Nike stock after the company announced its quarterly financial results .

But it is also the main reason why I believe Nike's stock has fallen so much since the beginning of 2026. In fact, Nike's stock has fallen by more than 46% this year.

Remember that I warned investors at the beginning of the year that Nike stock did not look like a good buying opportunity, and I continued to warn them throughout the year that it did not look like one .

I kept repeating: No, no, no, not yet, not yet, until the stock price dropped to about $40.

Then I thought, well, you know what? The stock price had fallen too much, and Nike was taking steps forward, and I thought that although it was a bit of an early decision , it was worth upgrading Nike's stock when it was at around $40 a share .

But after the company announced those quarterly financial results about a week ago, things changed dramatically, with the management team saying things would get worse before they got better.

The management team says that in support of a healthier market environment and stronger full-price realization, they expect these actions to put downward pressure on reported revenue for the remainder of 2027.

This was new and extends into 2028. So, it won't just be affected in 2027, but will likely extend into 2028. Wow, this is much worse than I anticipated when I upgraded Nike stock at around $40 per share .

These results were far worse than I had expected from Nike. I did expect revenues to decline in 2027. However, I estimated a slight decrease and anticipated improvement throughout the year.

So, I was estimating a rate that might be -4, 5, or 6% in the first quarter, and maybe -3, 4, or 5% in the second quarter, then maybe stability in the third quarter, and maybe stability again in the fourth quarter or an increase of 1 or 2%.

The decline is still in place for the year as a whole, but with an improving trend as these actions, strategic changes, and restructuring efforts begin to take effect, I would have expected Nike's business to start showing the benefits of those investments in the second half of fiscal year 2027.

But what management is saying is that this is not the case. The situation will actually get worse as the year goes on. They announced a decline of -4% in the first quarter, and they expect a decline of -7, 8, or 9% for the whole year.

This means that the second, third and fourth quarters will be much worse than -8 or 9%, bringing the entire year to the range of -7, 8, or 9%.

So things are not getting better as the year progresses, but rather getting worse , and this is something I did not expect. I was expecting us to start seeing improvement here in 2027, and then accelerate that improvement in 2028.

What management is saying is that there will be pressure on revenues for the remainder of 2027 and into 2028. I wouldn't be surprised if they came back to us in 6 months to tell us that 2028 is likely to be another year of decline.

As is usually the case with most companies, when revenues decrease by a certain percentage, profits decrease by a larger percentage, and vice versa .

Nike says the same thing here. They expect their operating income, an indicator of earnings before interest and taxes, to fall by a larger percentage than revenue. Therefore, with revenues declining by a significant percentage, operating income is likely to fall by a percentage closer to 15 to 20%. This is the likely figure for fiscal year 2027.

It's much worse than I expected, so I had to lower my estimates for Nike , and I now calculate the fair value of the company at $26.60. The current market price is $35.

Also, this fair value estimate for Nike I kept lowering and lowering and lowering approximately every 3 months; With each quarterly report released by Nike, the results are worse than I expect, and I am constantly forced to lower my estimates for them.

I was more optimistic about Nike stock despite warning investors against buying , but even that pessimistic estimate wasn't enough for Nike and I had to lower my estimates further.

Based on future earnings price, Nike stock is trading at its lowest valuation in years, with a forward price-to-earnings ratio of just 20. You have rarely had the opportunity to buy Nike stock at this valuation, but Nike has rarely been in this position where revenues are declining by about 10%.

Revenues have been declining for more than a year, operating margins and operating profitability have fallen, trade barriers are increasing, the consumer situation is getting worse, and arguably Nike’s competitive position is at its worst in decades.

Therefore, I can understand the challenges surrounding Nike's stock and why investor sentiment has turned negative towards the company.

I certainly wasn't positive about the company until the stock dropped below $40, and after seeing these results, I'm not excited about Nike stock even at these levels .

I am currently reviewing the price at which I would be willing to buy Nike stock. With Nike stock trading at $35, I wouldn't be interested in buying at those levels just yet, not until I start seeing better performance from Nike.

Or if the stock price drops to near $25, I would be more interested at those levels. So, this is why Nike's stock has crashed, and in answer to the question: Do I think it's a buying opportunity right now? No, I don't think that's the case.

I think there is a lot of work to be done at Nike, and I don't want to be part of that journey while Nike tries to solve its problems.