Nike Is Down 77% From Its Peak. Should You Buy Before It Reports Earnings on Oct. 1?

Nike, once a blue chip staple, is now a struggling stock with shares down 77% from their peak in late 2021 and around 44% lower in 2026 as of now. The company is making efforts to turn its fortunes around, but this raises questions about whether investors should buy the stock before its earnings report on October 1 or wait for better timing.

Nike's biggest challenge lies in China, where revenue declined by 12% in the most recent quarter. This decline is attributed to the growing popularity of Chinese-based brands among consumers in the country. Nike acknowledges this trend and is taking steps to address it, including rebuilding wholesale relationships, reducing excess inventory, and focusing on key sports, locations, and cities.

Despite these challenges, Nike's financial position remains robust. The company has around $9 billion in cash and short-term investments, which provides a solid cushion. Additionally, Nike continues to pay a quarterly dividend of $0.41 per share, offering some income to shareholders.

Given the current situation, one might wonder whether it's a good time to buy Nike stock before the earnings report. The company's turnaround efforts and strong financial foundation are positive signs, but the significant decline in China's market poses a concern. Investors may need to weigh the potential upside of Nike's restructuring against the risks posed by the Chinese market and the upcoming earnings report to make an informed decision.