BONUS: Nike's "Cheap" Setup Isn't What It Looks Like  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

March 31, 2026 The Ugly Truth About the Starlink IPO BONUS: Nike's "Cheap" Setup Isn't What It Looks Like A message from our friends at Brownstone Research (Sponsor) Ugly Truth About the Starlink IPO Editor's Note: If you want to know which chipmaker could be the next NVIDIA, just ask Jeff Brown. He knows more about AI chips than practically anyone on the planet - Thanks to his senior executive roles at Qualcomm, Juniper Networks, and NXP Semiconductors... And Jeff just uncovered that one tiny chipmaker - 148 times smaller than NVIDIA - is set to provide Musk 5 billion chips in the next two years alone. Click here for the full story or read more below. Dear Reader, Everyone waiting for a Starlink IPO is missing one vital detail: The product's most rapid growth stage is in the past... And Wall Street is now focused on an entirely different Musk product. Sure, the earliest Starlink investors saw mind-blowing 6,457,464% gains... Which meant they could turn a single $1,000 into over $64.5 million. Needless to say... Those kinds of gains are long gone. HOWEVER... Wall Street analysts now say Musk's new AI product is set to bring in 684X Starlink's revenue... And he hasn't even launched it yet. Just think about that. Starlink turned $1,000 into over $64.5 million for early investors. But this is set to be 684X larger... And there's still a very small window to get in on the ground floor. This isn't about pre-IPO investing or anything like that... This is a ticker you can buy in any brokerage account... Yet most people have no idea about its Musk connection. But - as you're about to see - it won't stay that way for long. Click here to see all the details before April 24. Regards, Jeff Brown Founder & CEO, Brownstone Research BONUS ARTICLE Nike's "Cheap" Setup Isn't What It Looks Like Nike isn't reporting a quarter tonight. It's reporting whether the "cheap narrative" is real… or just a trap dressed up as value. The stock has reset. Expectations are low. The numbers look ugly enough to tempt you. That's exactly when you need to slow down. Because "down a lot" and "cheap" are not the same thing. Scoreboard: What Actually Happened (Going In) Here's the setup—no fluff, just numbers: Revenue estimate: $11.23B (flat YoY) EPS estimate: $0.29 (down ~45–48% YoY) Operating income: ~$512M (-31% YoY) Gross margin: down ~175–225 bps Options implied move: ~$3.79 (~6–7%) Historical average move: ~8%+ per earnings Translation: The bar is low. But not low enough to ignore the trend. The Real Reason This Quarter Matters This isn't about whether Nike "beats." It's about whether the business is stabilizing. Because right now, Nike is getting squeezed from both sides: 1) The Consumer Split We're in a K-shaped economy: Top 20% of earners → driving ~60% of spending Lower-income consumers → cutting discretionary purchases Nike sits right in the middle of that divide. A $120–$180 sneaker is: Easy for higher-income buyers Optional (or skipped) for everyone else That's a demand problem—not a marketing problem. 2) The Cost Problem Nike's model: Design → outsource → sell at premium Now: Tariffs are raising input costs Supply chains are under pressure Estimated impact: ~$1.5B annual cost headwind That's not noise. That's margin compression. Deep Dive: What Nike Actually Is Let's simplify the business: Nike makes money by: Designing premium athletic footwear/apparel Manufacturing globally (mostly Asia) Selling through: Direct-to-consumer (DTC) Wholesale partners Digital channels Revenue mix: ~2/3 footwear High-margin categories: running, basketball, lifestyle The issue: DTC has slowed China is weak Wholesale is doing the heavy lifting That's not a clean growth story. That's a transition. The Data Section: What the Numbers Are Saying Here's the real picture: Revenue Trends Q3 FY25: $11.3B (-9% YoY) Q2 FY26: $12.43B (+1% YoY) Q3 FY26 est: $11.23B (flat) No growth. Just stabilization attempts. Profitability EPS: $0.54 → $0.53 → $0.29 est Gross margin: 41.5% → 40.6% → ~39.5% est Margins are compressing. And that's before any macro gets worse. Regional Signals North America: stabilizing, wholesale improving China: ~-16% YoY decline DTC: still under pressure You don't get a premium multiple with this mix. Is It Cheap? Here's where most investors get it wrong. Yes—Nike looks cheaper: Lower multiple Reset expectations Stock off highs But ask the real question: Cheap relative to what? The Reality Earnings are falling Margins are compressing Growth is uncertain So: It's cheap on today's numbers But not necessarily cheap on normalized earnings The Key Distinction "Cheap because broken" vs "Cheap because misunderstood" Nike is somewhere in between. That's a dangerous zone. Bull / Base / Bear Bull Case Revenue beats meaningfully (> $11.5B) Margins outperform guidance North America wholesale continues strong momentum Tariff impact manageable Result: Stock re-rates quickly Narrative shifts to "turnaround working" Base Case Revenue in-line (~$11.2–11.4B) EPS slight beat Margins within guidance China still weak Result: Stock churns No conviction either way Bear Case Revenue miss Margins worse than expected China deteriorates further No clear FY2027 outlook Result: Stock retests lows (~$50 range) Turnaround credibility questioned Action Plan for Tomorrow Here's the Cheap Investor playbook: 1) Do NOT chase a headline beat Nike has beaten before… and still dropped. Guidance > earnings. Always. 2) Only scale in on REAL improvement If: Revenue beats AND margins outperform Then: Start with 25–30% position 3) Mixed print = wait In-line revenue Weak margins Soft guidance → No edge 4) Miss = step aside If both revenue and margins miss: → Don't catch it Wait for clarity 5) Use levels, not emotions Watch $50–52 zone for potential value entry Avoid reacting to noise Cheap Investor Checklist Track these after the print: Revenue vs $11.23B Gross margin vs -175 to -225 bps guide North America wholesale growth trend Nike Direct stabilization (or not) China trajectory (still declining?) Inventory levels (discounting risk) FY2027 commentary (this matters most) Tariff mitigation strategy clarity Bottom Line Nike looks like a bargain. But it's not a clean one. If: Revenue stabilizes Margins stop compressing And guidance shows real recovery → Then the "cheap" thesis starts working If not: → This is just a slower grind lower disguised as value Nike isn't broken. 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