Nike Stock Is Down 78% From Its Peak. Here's Why I'd Buy and Hold for a Decade.

In November 2021, Nike's stock peaked at $179.10, but it has since plummeted to just under $40, marking a staggering 78% decline. Rather than focusing on short-term numbers, I believe a decade-long perspective is more beneficial. In September 2025, CEO Elliott Hill revamped Nike into smaller, cross-functional teams dedicated to specific sports like running, basketball, and training.

Running, in particular, has shown promising results, with Nike nearly tripling its share of the max-cushioning category and launching four new running shoes in a short span. The company's World Cup strategy also proved successful, doubling sales of World Cup team kits and refreshing soccer gear presentation. Interestingly, Nike is intentionally reducing revenue from its iconic Dunk line and curtailing Jordan retro launches to prevent oversupply.

In China, where revenue dropped 26% last quarter, Nike is pulling out of discount-heavy online channels. Unlike previous strategies, Nike is now selling directly to Amazon and rebuilding ties with Dick's Sporting Goods, which acquired Foot Locker in September 2025. The women's segment, spearheaded by the launch of the Caitlin Clark signature shoe and the new NikeSKIMS brand, is seen as the biggest growth lever.

Despite the stock's current valuation, management targets $2.5 billion in savings through fiscal 2031 and aims for an EBIT margin of at least 10% by 2030. I plan to gradually build a position over the next year, closely monitoring the operating margin goal. Nike's deliberate shrinking, rather than forced contraction, makes it an attractive turnaround candidate for a long-term investment.