Travis Hoium

Welcome back to Motley Fool Money.

Nike is down 14% as we're recording early on Wednesday.

They reported a ho-hum quarterly report after the market closed yesterday.

This isn't a company that's really been knocking it out of the park for a while now, but revenue was flat, constant currency sales were actually down.

Rachel, what did you see and what is the market rejecting today?

Lou, the fascinating thing here is, I've analogized them to Under Armour, which is not a flattering analogy.

Nike's stock first passed the $45 stock price in 2014.

The stock has gone nowhere for 12 years.

We're in a 74% drawdown as we're recording.

And still,

Shares are trading for 30X earnings and 30X forward estimates.

We talked a little bit about Target before, where they can't seem to do anything right, but then you look up and the stock trades for 10X or 11X earnings.

You go, ah, I may find some value in that if they can turn things around.

This has still got to be a huge turnaround for Nike, and it just doesn't seem like it's sticking.

It is fascinating how this has changed those supply-demand dynamics.

The interesting thing I saw in the report was that they're actually gaining share in wholesale.

That was up nicely, mid-single digits.

But their direct-to-consumer is down.

So the strategy that they put in place when the pandemic started and what you think these companies would like to be growing is that building that direct relationship to customers, just still not clicking.

Yeah.