Nike’s stock is under pressure. Blame dad shoes.

Sneaker and apparel giant Nike (NKE), has severely underperformed in the market over the past year. The company's shares have declined by 17%, in contrast to the S&P 500's (^GSPC) 28% gain. Nike has also lagged behind its competitors, including On Holding (ONON) (+55%), Skechers (SKX) (+44%), and Decker's Outdoor (DECK) (+87%).

Stifel analyst Jim Duffy suggests that Nike's challenges may continue, particularly due to market share loss to brands like New Balance and Asics (ASCCY) during the back-to-school shopping season. As a result, Duffy has lowered his price target for Nike to $79, indicating that profit forecasts may be overly optimistic given the declining relevance of the Jordan brand and shifts in consumer preferences.

Yahoo Finance Executive Editor Brian Sozzi examines Nike's lackluster stock performance.

Video Transcript

All right.

Welcome to a new episode of Yahoo Finance's opening bid.

Um, Yahoo Finance executive editor Brian Sazi.

Now let's make some money and get a lot smarter.

And first we have to hit, uh, shares of Nike, uh, shout out to Jim Duffy over at Steel, coming out, dropping the hammer on this Monday morning on all things Nike cutting his price target and I couldn't help but to absolutely giggle, is it?

Laugh quietly, uh, in a in a secluded room with no pads around it, whatever it is, Uh, I really like the points Jim is making here and what I am deeming the most disappointing stock in the entire stock market of the past year.

That's Nike, uh, Duffy, warning about a couple of things off the jump here.

First up, rapidly waning relevance of core franchises.

When was the last time you heard Nike describe that fashion?

That's awful.

Uh, he's also saying Nike is lacking indicators that newness is driving sales in the marketplace.

Uh, slowing or declining relevance of the Jordan brand, which got me thinking, I mean, there are people alive today.

Kids in high school.

I have no really idea who?

Michael Jordan is maybe a YouTube player, and they definitely know Derek Jeter.

Uh, they know Jeter, but they don't necessarily remember him playing now.

Suddenly, my generation of millennials is old.

I mean, we were the ones driving that Jordan brand, but anyway, so I'm losing relevance there.

What Duffy is seeing is possible is on, uh, new balance sneakers.

A lot of these a KAAK a dad shoes, dad shoes taking Cher away from Nike.

So I guess I can't be.

I can't be too surprised about that one.

and they are pretty comfortable.

I got a pair of $40 schedules from target.

I mean, these shoes are comfy as hell.

They look like crap, but they're really cool.

Uh, so, all in all, uh, Jim Duffy over at steel, looking for, uh, just, uh, So I think some worse than expected earnings trajectory from Nike over the next year makes sense.

Me, uh, really quick shout out here.

You're going to Yahoo Finance.

You see, Nike shares still valued at a premium to the broader market 27 times four P multiple.

To me, that looks absolutely ridiculous.

Just given all the fundamental concerns surrounding Nike.

John Donahoe, CEO since 2020.

I think he's in the hot seat.

He could be getting the axe within 18 to 24 months.

Just not getting the job done.

Former Tech executive.

Over at service now and, of course, former CEO of eBay.

Always unsure why he's leading Nike nonetheless, uh, named to watch there.