Should You Buy the Dip in Nike Stock While the Market Is This Nervous?
Nike may no longer be a growth stock, but it can still reward shareholders who understand its transformation.
Nike's stock has plummeted by 76.5% over the past five years, falling nearly 40% in 2026 compared to the S&P 500's gain of about 12%. While the iconic brand remains profitable, recent market volatility has led some investors to question whether Nike is a buy-the-dip opportunity. However, there are compelling reasons why buying the dip in Nike stock may not be advisable just yet.
In 2021, Nike experienced record-breaking fourth-quarter earnings, with sales surging 96% year-over-year. However, the company now anticipates a modest single-digit drop in revenue for fiscal 2027. The key question is whether Nike can regain the hypergrowth stage it once enjoyed. Rather, the decision to buy Nike stock on the dip should be based on investors seeking an income stock for their portfolio.
Although Nike is profitable and has substantial cash reserves ($8.3 billion) and manageable debt ($11.1 billion), the company's dividend growth is commendable, with 24 consecutive years of increases. Nonetheless, for income investors, Nike would benefit from stable revenue generation and modest sales growth over the coming quarters to justify its dividend payouts.
Currently yielding 4.2%, the stock price needs to stabilize before considering it as an income stock investment. For now, the author advises against buying the dip and recommends exploring The Motley Fool's premium services for better investment guidance.
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