Nike vs. On Holding: Market Comparison
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2026
0mins
Source: Fool
- Nike's Market Performance: Nike (NKE) stock has fallen 15% over the past year, despite its sales exceeding all direct competitors combined, indicating strong brand power; however, missteps like cutting wholesale partnerships and lack of innovation have allowed emerging brand On Holding to capture market share.
- On Holding's Growth Potential: On Holding (ONON) achieved a 35% sales increase in the second quarter, driven by strong performance in direct-to-consumer and wholesale channels, particularly with apparel and accessories doubling in sales, indicating rapid brand recognition in the premium athletic market.
- Margin Comparison: Nike's gross margin dropped by 3 percentage points to 40.72% in its latest report, while On Holding's gross margin widened from 60.6% to 65.7%, showcasing On's resilience and profitability in the high-end market.
- Investor Preferences: Value investors may prefer Nike's stability, while growth investors might opt for On Holding's high growth potential, even though both have similar forward P/E ratios of 28 and 36, respectively.
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Analyst Views on NKE
Wall Street analysts forecast NKE stock price to rise
21 Analyst Rating
14 Buy
7 Hold
0 Sell
Moderate Buy
Current: 44.360
Low
62.00
Averages
76.11
High
110.00
Current: 44.360
Low
62.00
Averages
76.11
High
110.00
About NKE
NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities. The Company's operating segments include North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA). It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. It also designs products specifically for the Jordan Brand and Converse. The Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. The Company also designs, distributes and licenses casual sneakers, apparel and accessories under the Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction: Despite a broader market recovery, Nike's stock fell 16% in April and is down 75% from its all-time high, with analysts widely downgrading the stock and lowering price targets, reflecting a pessimistic outlook on its recovery prospects.
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- Disappointing Earnings: Nike's fiscal third-quarter revenue remained flat at $11.3 billion, down 3% on a currency-neutral basis, slightly exceeding estimates of $11.23 billion, while earnings per share fell from $0.54 to $0.35, indicating a significant decline in profitability.
- Job Cuts Announced: The company plans to cut 1,400 jobs, primarily in its technology department, aimed at making structural changes to address ongoing business challenges, which may impact employee morale and the company's innovation capabilities.
- Market Reaction: Despite a broader market recovery, Nike's stock fell 16% in April and is down 75% from its all-time high, with analysts widely downgrading the stock and lowering price targets, reflecting a pessimistic outlook on its recovery prospects.
- Innovation Setbacks: The departure of Nike's innovation chief Tony Bignell after less than a year raises further concerns about the company's turnaround ability, although a new collaboration with Kobe sold out quickly, indicating that the brand still possesses some market appeal.
See More
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- Earnings Report Disappointment: Nike's fiscal Q3 revenue was flat at $11.3 billion, slightly above estimates but down 3% on a currency-neutral basis, indicating severe challenges in sales growth and reflecting a lack of confidence in the company's recovery prospects.
- Stock Price Plunge: Nike's stock fell sharply at the beginning of April, finishing the month down 75% from its all-time high, which not only undermines investor confidence but also places the company at a disadvantage in the highly competitive sportswear market.
- Management Changes: The departure of innovation chief Tony Bignell after less than a year highlights the challenges faced during the company's turnaround efforts, potentially delaying its path to recovery further.
- Layoff Announcement: Nike announced a plan to cut 1,400 jobs, primarily in its technology department, aimed at making structural changes; while this may impact morale in the short term, it could enhance operational efficiency in the long run.
See More
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- Stock Price Plunge: The stock fell sharply at the beginning of April due to disappointing earnings, finishing the month down 16%, and is now 75% below its all-time high, reflecting a collapse in business performance over the past five years.
- Leadership Changes: Nike's innovation chief, Tony Bignell, left the company after less than a year, highlighting challenges in its turnaround efforts, while the company announced 1,400 job cuts primarily in its technology department to implement structural changes.
- Cautious Future Outlook: Management expects revenue to decline in low single digits over the next three quarters and anticipates a return to gross margin expansion by Q2 2027, leading Wall Street analysts to downgrade their ratings, reflecting a pessimistic view on Nike's recovery.
See More
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- AI Stock Surge: AI-related stocks like Arm, Broadcom, and Alphabet saw significant gains in April, with Arm surging nearly 40% and others rising over 30%, reflecting sustained investor enthusiasm and strong demand for AI technologies.
- Impact of Rising Memory Prices: Companies like Meta and Microsoft have raised their capital expenditure guidance due to surging memory prices, with Microsoft projecting $190 billion in capex for 2026, of which $25 billion is attributed to rising component costs, highlighting the tightness in the memory market.
- Multi-Year Supply Agreements: SanDisk has signed five multi-year supply agreements valued at over $11 billion, ensuring stable demand for its customers and indicating strong bargaining power for memory manufacturers, which could impact future sales and margins.
See More
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- Market Capital Decline: Nike's market capitalization has plummeted over 70% since its peak in 2021, presenting a seemingly attractive investment opportunity; however, the underlying changes in the company's fundamentals require thorough analysis.
- Inventory Buildup Issue: The company's aggressive direct-to-consumer strategy has overshadowed its wholesale business, leading to misjudged demand and significant inventory buildup, forcing Nike to offer discounts that harm its brand image and financial performance.
- Growth Slowdown: Nike is experiencing a notable slowdown in growth, particularly in high-growth markets like China, with a projected 10% revenue decline in fiscal 2025, contrasting sharply with its historical trend of sustained growth, which has shifted investor sentiment to pessimism.
- Valuation Analysis: While Nike's price-to-sales (P/S) ratio has dropped to 1.5, indicating some value, its price-to-earnings (P/E) ratio stands at 26.6, remaining within historical ranges, suggesting that the stock is not obviously cheap during this transformation phase, necessitating careful evaluation of future earnings potential.
See More
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- Share Buyback Initiative: The company announced an additional $1 billion for share buybacks, demonstrating management's confidence in the stock's undervaluation, with a 38% reduction in share count over the past decade contributing to a total return of 192%, although market reactions remain tepid, warranting investor attention on long-term effects.
- Operating Income Growth: Despite net income being impacted by investment losses, Domino's operating income rose by about 10% this quarter due to a more efficient supply chain and higher franchise fees, indicating strong core business profitability, even as the market reacted negatively to short-term earnings reports.
- AI Partnership Update: Microsoft has modified its partnership terms with OpenAI, eliminating revenue share payments for its own products using OpenAI models, significantly boosting Microsoft's margins, while OpenAI gains flexibility to license its models to other cloud providers, suggesting a more diversified future collaboration between the two companies.
See More
