Every earnings season has its share of overreactions, as stocks can miss both the upside and the downside. Fear of missing out (FOMO) can trigger panic and a leapfrog mentality, where emotions cause an overreaction. Investors can develop FOMO when they believe a stock is rising and don’t want to miss out. However, investors can also develop FOMO, where they worry that their stock will drop significantly and rush for the exit to try to limit losses. In many cases, these overreactions create opportunities for investors who have been patiently waiting for a better entry. Here are two stocks that could present buying opportunities on the way down for bullish investors.
Nike: Former CEO Will Lead Change Again
NIKE today
(As of 5:35 pm ET)
- 52 week range
- $70.75
▼
$109.96
- Dividend yield
- 2.08%
- P/E ratio
- 21.99
- Target price
- $89.58
Famous manufacturer of sports shoes and clothing Nike Inc. New York Stock Exchange: IZ 2024 turned out to be a difficult year, as its shares fell 29% as of December 21, 2024. The consumer discretionary company has failed in its strategy to strengthen its direct-to-consumer (DTC) channel, alienating wholesalers such as Foot Locker Inc. New York Stock Exchange: Florida. Competitors like it About Holding AG New York Stock Exchange: Honor and Hoka, belonging to Deckers Outdoor Co. NYSE: CHAMBERseized the opportunity to capture market share, delivering double-digit growth while Nike was in decline.
Coupled with weak sales in China and tightening consumer spending in North America, Nike saw sales decline across its DTC, wholesale and digital channels. Its CEO resigned following the kitchen sink quarter, setting the bar low to allow former CEO Elliot Hill to retire and lead the turnaround on Oct. 14, 2024.
The fiscal second quarter 2025 earnings report wasn’t too bad; Management reduces shares
Hill, a former 32-year Nike veteran, presided over his first earnings report since his return. Nike reported second-quarter fiscal 2025 earnings per share of 78 cents, beating the consensus estimate by 15 cents. Revenue fell 7.7% year over year to $12.35 billion, still above the consensus estimate of $12.11 billion. Nike brand revenue fell 7% year over year to $12 billion. Nike Direct revenue fell 13 % YoY to $5 billion, primarily due to a 21% YoY decline in NIKE Brand Digital and lower Nike-owned stores by 2%. Wholesale revenues fell 3% YoY to $6.9 billion. Revenue in North America fell 3% YoY. Revenue in the EMEA region fell 7% YoY. Revenue in Asia Pacific and Latin America fell 3% YoY. China revenue fell 8% year over year.
NIKE stock forecast for today
$89.58
Growth potential 17.76%Moderate purchase
Based on ratings from 29 analysts
| High forecast | US$120.00 |
|---|---|
| Average forecast | $89.58 |
| Low forecast | $70.00 |
NIKE stock forecast details
Nike shares closed at $77.10 on December 19, 2024. Nike shares rose to $86.24 immediately after the report as investors breathed a sigh of relief that the results weren’t too bad.
Nike maintained its forecasts for the conference call, where it announced that third-quarter 2025 revenue is expected to fall by double digits, well below consensus estimates for a 2.4% year-over-year decline. Gross margin is expected to decline 300 to 350 basis points, including restructuring charges for the same period last year. This caused Nike shares to fall and return to post-market gains, falling to a post-market low of $71.
CEO Elliot Hill’s Priorities
Nike will reinvest in its brands to create inspiring stories. They also plan to be aggressive in sports marketing, having re-signed deals with the NFL, NBA, WNBA, FC Barcelona and the Brazilian Football Confederation in the last 60 days. Hill will prioritize regaining and earning the trust of its key wholesale partners and even refer to contacts by name at retailers. He plans to clear out obsolete inventory to return to premium pricing and transition Nike Digital to a full-fledged model. Most importantly, Hill wants Nike to refocus on sports.
Hill acknowledged that long-term gain will require short-term pain:
“I recognize that some of these actions will have a negative impact on our short-term results. But here we are looking at the long term. We make decisions that are best for the health of our brand and business, decisions that will enhance shareholder value. I firmly believe that NIKE’s path to sustainable and profitable growth is through sports.”
Brief description: Robust artificial intelligence environment
Synopsis today
(As of 5:30 p.m. ET)
- 52 week range
- $457.52
▼
$629.38
- P/E ratio
- 33.92
- Target price
- $649.00
Developer of electronic design automation (EDA) software and semiconductor intellectual property Synopsis Inc. NASDAQ: CNPC has been struggling to hold onto triple bottom support at $492.00 since reporting fourth-quarter 2024 earnings. Like most chip companies in the computer and technology sector, Synopsis views the current semiconductor landscape as a tale of two markets: the robust artificial intelligence (AI) market and the mainstream commercial market serving mobile, PC, laptop, industrial and industrial customers. cars. .
Synopsis benefits from its AI-focused customers but faces headwinds from the rest of the semiconductor industry. Synopsis software and intellectual property (IP) products are tools that semiconductor companies use to design and develop new chips. If these companies reduce their research and development (R&D) expenditures due to market downturns or other factors, Synopsys may experience decreased demand for its products and services, which would impact its revenues and growth.
China Headwinds require soft management; Inventory reduction
Synopsys stock forecast for today
$649.00
Growth potential 32.42%Moderate purchase
Based on ratings of 10 analysts
| High forecast | $690.00 |
|---|---|
| Average forecast | $649.00 |
| Low forecast | $570.00 |
Synopsys stock forecast details
Synopsis reported strong fourth-quarter fiscal 2025 earnings per share of $3.40, beating the consensus estimate by 10 cents, and revenue rose 2.3% YoY to $1.64 billion, beating the consensus estimate by $5 85 million However, the new Trump administration’s promise to raise tariffs and tighten trade restrictions with China could pose problems for Synopsys, given the semiconductor industry’s dependence on global supply chain and its significant links with the Chinese market.
This uncertainty has led Synopsis to provide weak guidance for the future. For the first quarter of 2025, the company issued guidance for earnings to decline by $2.77 to $2.82 versus the consensus estimate of $3.52, with revenue ranging from $1.435 billion to $1.465 billion versus $1.64 billion. For the full fiscal year 2025, earnings per share will be between $14.88 and $14.96, up from $14.89, and Revenue is expected to be between $6.745 billion and $6.805 billion, missing the consensus estimate of $6.9 billion.
Synopsis is awaiting regulatory approval but hopes to complete its $35 billion acquisition of the engineering simulation software developer. ANSYS Inc. NASDAQ: ANSSS in the first half of 2025.
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