Nike, Intuit and Oracle: Value or Value Trap

When you see a famous stock down more than half in a year, the natural thought is that it's on sale. Sometimes it is. Sometimes it's a value trap: a stock that looks cheap because the business underneath it is shrinking.

Three of the best-known companies in America are in that spot. As of 25 September, Nike was down 54% from its high a year earlier and had just touched its lowest price in a year. Intuit, the company behind TurboTax, was down 61%. Oracle, one of the biggest builders of AI data centres, was down 57%.

They aren't alone. On Monday 21 September, 17 companies in the S&P 500 were at their lowest price in a year, while the index itself was up 13.7% for the year. Trefis, which publishes that list every day, framed the question in one line:

So this issue, we answer it for those three. Above the line: what separates a value from a value trap, one of each from history, and the three checks I use to tell them apart. Below the line: Nike, Intuit and Oracle run through all three checks, with the numbers.

Compare profit per share and the P/E now with a year ago. If profit held up and the P/E halved, the price did most of the falling. Check cash from operations as well as reported profit, since cash is harder to dress up, and strip out one-off gains first.

Look at what the company reports about its customers: units sold, users, store visits, and whether sales grow from more buyers or just higher prices. Also, I check for its moat and see if the company has a strong moat that can last and grow. This is the check that separated AmEx from Kodak, and it shows up in profit last.

Does the cash coming in cover what the business spends and pays out, or does it need new loans or new shares to keep going? It's question 3 from last week, pointed at a stock you don't own yet. A business that has to raise money while its share price is low hurts its owners even if it survives.

These line up with three of the four pillars Smart X Terminal scores every stock on: profitability, moat and balance sheet. Most days I open its list of stocks near their 52-week lows and run the checks on anything I'd be happy to own. It takes me about 30 seconds. Doing one stock by hand used to take me about 3 hours.

Quick note: the prices and figures here are as of 25 September 2026, the last market close before I wrote this. Markets move, so for the live picture I keep Smart X Terminal updated in real time.

Below the line, I run Nike, Intuit and Oracle through all three checks, with the numbers. One comes out looking like a value, one shows the signs of a trap, and one fails in a way that has nothing to do with its customers. You'll also see the one number I'm watching for each.

Reading the free edition? The near-52-week-low list I start from lives in Smart X Terminal’s screemner. Pick any name on it and try the three checks yourself.

A reminder before the numbers: none of this is a recommendation, and I don't own any of the three. It's the same work I do before a stock goes anywhere near my watchlist.

Intuit (INTU) hit $703.96 on 29 September 2025. On 25 September 2026 it closed at $275.79, down 61%.

Profit went up. Earnings per share rose from $13.67 in fiscal 2025 to $16.46 in fiscal 2026, up 20%, and cash from operations rose 42% to $8.8 billion. What collapsed was the price per dollar of profit, from about 51 times to about 17.

The customer check is less comfortable. TurboTax's US customer count, which Intuit calls units, fell 2% this year to 39.0 million.

The market's fear is AI. Intuit fell 12–13% in January after Anthropic launched Claude Cowork, according to Mizuho, and in April Perplexity launched a tool that drafts tax returns. So far these tools draft returns without filing them, and Intuit has plugged TurboTax into both ChatGPT and Claude rather than fight them.

Paying its own way is easy for Intuit: $8.6 billion of free cash flow last year, against $7.7 billion of debt and $7.2 billion of cash and investments.

The number I'm watching is next year's TurboTax count, after the 2027 tax season. If it keeps shrinking while prices rise, the low P/E is telling the truth.

Nike (NKE) hit $76.97 on 2 October 2025. On 25 September 2026 it touched $35.22 and closed at $35.75, right at the bottom of its one-year range.

Nike's reported profit barely moved last year: earnings per share of $2.10, down 3%. But that includes a one-off refund of tariffs worth about 52 cents a share. Take it out and Nike earned closer to $1.58, roughly a quarter less than the year before. Five years ago, in fiscal 2021, Nike kept 12.9 cents of profit from every $1 of sales. Last year it kept 6.7 cents, and that's with the refund. In the first quarter, reported on 1 October, earnings per share were 48 cents, a cent below a year earlier. The one better number: Nike kept 42.8 cents of each $1 of sales after the cost of making and shipping its products, up from 42.2 cents, helped by lower warehousing and logistics costs.

The customer numbers point the same way. Sales through Nike's own stores and app fell 6% on fewer visits, and sales in Greater China fell 11%. The first quarter was weaker again: own stores and app down 8%, online down 13% and Greater China down 22%. Nike says it deliberately cut some online sales it called unprofitable, but chief executive Elliott Hill also said there's a “lack of energy in the lifestyle space right now, which is impacting traffic.” On 25 September, Bank of America cut Nike to Underperform, saying the recovery is “taking longer to materialize,” and pencilled in $1.43 of earnings per share for this year. And I can see Nike's moat is deteriorating with so much competition coming up, and Nike not being able to stay on top of the fashion trends when it comes to sport apparel and shoes nowadays.

Nike can still pay its own way: $9.0 billion of cash and short-term investments against $7.9 billion of debt. But the dividend was $1.63 a share last year. That's more than the roughly $1.58 Nike earned without the refund. And on 1 October Nike said it expects to earn $1.15 to $1.35 a share this year before restructuring costs, below Bank of America's $1.43, and expects sales to fall again. Its finance chief called the dividend “a very significant priority.” That doesn't mean a cut is coming. It does mean the dividend now depends on profit recovering.

The number I'm watching is visits to Nike's own stores and app. Wholesale growth can be bought with discounts to retailers. People choosing to shop with Nike directly can't be bought that way.