Is Now the Time to Buy This S&P 500 Stock That’s Down 66% and Hold for 20 Years?

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Is Now the Time to Buy This S&P 500 Stock That’s Down 66% and Hold for 20 Years?

Effects from previous strategic blunders helped drive sales and net income 9% and 32% lower in Q3, respectively.

Management’s focus is on clearing out older inventory, emphasizing the brand’s strength, and introducing in-demand products.

Shares look extremely undervalued, but a successful turnaround could take time.

This is the hidden content, please

• Sign In
• or
• Sign Up

After a volatile start to the year, the S&P 500 (SNPINDEX: ^GSPC) has come roaring back. It’s up 8% just in the past month, slowly approaching its peak. But not all businesses are benefiting from renewed bullish fever on Wall Street.

As of May 23, one well-known

This is the hidden content, please

• Sign In
• or
• Sign Up

is trading a gut-wrenching 66% below its all-time record, established in November 2021. There’s a lot of pessimism, but maybe it’s time to take a closer look at this company as a potential 20-year holding.

Image source: Getty Images.

The business whose shares have fallen off a cliff is none other than Nike (NYSE: NKE). The sportswear giant has had a difficult run in recent years. The previous management team, led by then-CEO John Donahoe, was all in on going digital and direct-to-consumer. This backfired with wholesale accounts, leading to greater visibility for rival products.

Nike’s sales in Q3 2025 (ended March 20) were down 9% year over year. And the expectation is for the top line to drop to the low end of the mid-teens range in the fourth quarter. A lack of product innovation has also added to the issues.

CEO Elliott Hill is trying to fix these problems. One of the top priorities is to start introducing footwear that gets consumers excited. On the distribution front, it’s about meeting customers where they are. Nike just announced it will begin selling products on

This is the hidden content, please

• Sign In
• or
• Sign Up

.

But first, Nike must move past its challenges. This means getting rid of old inventory. To do this, the business has offered excess promotions and markdowns. That’s why the gross margin shrunk from 44.8% in the year-ago ******* to 41.5% in Q3.

“We expect these actions will continue through the first half of fiscal 2026,” Nike CFO Matt Friend said on the earnings call when discussing the

This is the hidden content, please

• Sign In
• or
• Sign Up

of cleaning out stale inventory. The good news is that revenue and gross margin trends should start to improve.

Nike’s ongoing challenges, coupled with the success of competitors, have led to declining market share. According to GlobalData, the business had 14.1% market share of the global sportswear industry in 2024, down from 15.2% the year before. Nonetheless, Nike is still the clear leader.

Story Continues

Hill and his team must focus on the fact that it remains the top dog in the industry. This means emphasizing the brand, the key asset that supports the company’s economic moat.

In the fashion industry, it can be difficult to find lasting success. Businesses must always try to figure out how consumer tastes are changing and then deliver on these needs. For what it’s worth, Nike’s brand has stood the test of time.

It helps that the company partners with top athletes and sports leagues. This raises its credibility on a worldwide stage. What’s more, Nike’s $48 billion trailing-12-month revenue base means it has greater financial resources than any other competitor to continue investing in marketing efforts and research and development initiatives.

With sales and earnings tanking, the market has soured on the business. Consequently, shares trade at a historically cheap valuation. The current price-to-earnings ratio of 19.9 is near the trailing-10-year low, highlighting extreme investor pessimism.

However, I think only patient investors comfortable with uncertainty should consider buying the stock. Ongoing economic fears, coupled with the

This is the hidden content, please

• Sign In
• or
• Sign Up

, create new headwinds Nike must navigate. A successful turnaround could take longer than expected.

But if you’re bullish on the durability of the brand, as well as Nike’s ability to create in-demand products, tell compelling marketing stories, and eventually get back to revenue and profit growth, this could work out to be a solid investment opportunity over the next two decades.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a

This is the hidden content, please

• Sign In
• or
• Sign Up

recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $351,386!*

Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,008!*

This is the hidden content, please

• Sign In
• or
• Sign Up

: if you invested $1,000 when we doubled down in 2004, you’d have $653,389!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

This is the hidden content, please

• Sign In
• or
• Sign Up

*Stock Advisor returns as of May 19, 2025

John Mackey, former CEO of Whole Foods Market, an

This is the hidden content, please

• Sign In
• or
• Sign Up

subsidiary, is a member of The Motley Fool’s board of directors.

This is the hidden content, please

• Sign In
• or
• Sign Up

has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends

This is the hidden content, please

• Sign In
• or
• Sign Up

and Nike. The Motley Fool has a

This is the hidden content, please

• Sign In
• or
• Sign Up

.

This is the hidden content, please

• Sign In
• or
• Sign Up

was originally published by The Motley Fool

This is the hidden content, please

• Sign In
• or
• Sign Up

#Time #Buy #Stock #Hold #Years

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up