To The Moon

$Nike(NKE)$ is expected to release fiscal third-quarter earnings on 21 Mar 2024 after the market closes (AMC).

Market is expecting earnings of 74 cents per share for Nike's fiscal Q3, down 6.3% year-over-year, on revenue of $12.3 billion (-0.8% YoY). Nike's third-quarter revenue is expected to decline 0.7%, marking its first quarterly revenue decline in nearly two years, as the sportswear maker struggles with product innovation and its direct-to-customer strategy.

Nike is also facing stiff competition in the apparel category from $Lululemon Athletica(LULU)$ Alo Yoga, and Vuori, and in the footwear category from upstarts Hoka and On. The concerns that top-line growth will remain sluggish over the next several quarters is not unfounded. This could be coming from a combination of underlying, spotty consumer demand, lulls in product innovation, and modest competitive incursions, in select categories.

Technical is showing Downtrend signal, as this might be due to how NIke have been trading over the last 2 weeks prior to its earnings. It has not been consistent in signalling whether it is a upside or downside.

From the detailed technical, we could see that Nike did attempt for more buying and the MACD did show some signs of upside, but not strong enough.

So I would expect Nike earnings to be pretty challenging, maybe the revenues might decline more than 0.7%.

Nike (NKE) Last Reported Earnings

NKE last reported earnings on 21 Dec 2023 after the market close (AMC). NKE shares declined -11.8% the day following the earnings announcement to close at 107.66. Following its earnings release, 90 days ago, NKE stock has drifted -6.9% lower.

From the time it announced earnings, NKE traded in a range between 97.06 and 109.57. The last price (100.27) is closer to the lower end of range.

Estimated implied straddle for upcoming earnings is 6.8%. We might see more than 10% decline in price effect if Nike revenue and outlook would suffer from LULU plan for more products range.

NIke need to innovate more in order to come back to the sportswear game.

Nike (NKE) Post Earnings Movement

The options market overestimated NKE stocks earnings move 58%of the time in the last 12 quarters.The predicted move after earnings announcement was ±6.9%on average vs an average of the actual earnings moves of 7.7%(in absolute terms).

This shows you that NKE tended to be more volatile than the options market predicted for the earnings stock price reaction.

This show that option valuation is undervalued, this could mean there is a glimpse of hope of price volatility on the upside move.

Implied move over last 2 days before earnings have been positive.

Nike (NKE) Hedge Fund Increase Holdings

We could see hedge fund are increasing their holdings in the last quarter, which should be encouraging. This should gather some investors sentiment.

Nike (NKE) Investors Sentiment And Holdings

Investors are positive on Nike and the portfolios holding NIke is increasing over the last 7 days and last 30 days.

This show that investors are still interested in Nike. But we need to watch the range of revenue decline for Nike.

Summary

NIke revenue decline would be key to me, whether they can keep the decline within 0.7% or 1%. Anything higher than that, could bring the stock price south bound.

I will be watching both LULU and Nike earnings closely.

Appreciate if you could share your thoughts in the comment section whether you think Nike could provide a better revenue in their earnings report.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.