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Nike Beat Earnings 8 Quarters in a Row and the Stock Fell 60%

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ticker lesson

Breakdown

0:00lesson

Nike stock performance and valuation

  • Nike beat earnings 8 quarters in a row
  • Stock down 60% over 8 quarters
  • Market cap dropped from 264B to 57B
  • Worst stock in Dow this year
  • 12-year low at $36/share
2:10lesson

Nike's historical price trends and earnings

  • Nike stock down from $170 to $35
  • 12-year low since 2014
  • No upside momentum in 2024
  • Gap downs after earnings
  • Market cap at 53B, down from S&P 100
4:12lesson

Options market and implied volatility for Nike

  • Implied volatility at 116% for this week
  • Implied move of $2.90 over 3 days
  • Call skew with more premium on upside
  • 30 strike is 5 points out of the money
  • Market pricing in upside risk
5:57lesson

End-of-year implied volatility and price targets

  • Implied move of $4.87 by December
  • 30 strike has 70 cents premium
  • 75 strike has 1% probability
  • Market pricing in upside velocity
  • Options skew reduces as time extends
7:49lesson

Earnings announcement focus and trading strategy

  • Implied move of $3 for earnings
  • Implied move of < $5 by December
  • Market focusing on October 1st
  • Trader buying call options for upside
  • Risking $100-$200 for potential rally

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