Nike Stock Plummets 78%: Is This the Setup for Patient Investors?

Nike stock has plummeted 78% from its all-time high in 2021, marking the steepest drop in the company's history. Despite this significant decline, analysts believe that Nike may be setting up a rare opportunity for patient investors to buy into the world's leading footwear and sports apparel brand at a value price.

The company's financials are still messy, with sales falling 1% year over year in fiscal 2026. However, margins are stabilizing, indicating that the turnaround is working. In the fourth quarter of its fiscal 2026, Nike's cost of sales fell 16% year over year, supporting a gross margin improvement to 49.2% from 40.3% in the same period last year.

Management now expects gross margin to expand beginning in the first quarter of fiscal 2027, earlier than planned and pointing to structural cost improvements coming through in the supply chain. The company is also shifting towards full-price sales, which may weigh on near-term revenue momentum but strengthen margins and earnings power.