Nike Inc. (NKE), the world’s largest athletic apparel company, has seen its shares gain 5.3% year-to-date (YTD) versus the S&P 500’s 11.8% rally over the same period. While the stock has underperformed the market, one team of analysts thinks that its story commands a much weaker position, warning on further downside as Nike investors finally run out of patience.

Cannacord Genuity analysts Camilo Lyon and Pallav Saini argue that “patience is wearing thin and panic may be setting in” at Nike. As the clothing and footwear giant struggles to ward of competition from a resurgent Adidas AG (ADDYY), negative sales comps by retailers including Foot Locker Inc. (FL) and Finish Line Inc. (FINL) have further dragged down the company’s sneaker business, suggest the analysts. (See also: Nike, Under Armour Shares Slip on Adidas Pressure.)

Where Is the Progress?

The stock’s peak at $67 in November 2015, reflecting a price-to-earnings ratio (P/E) of 29, to its close at just under $54 (21.4x P/E) reflects an approximate 20% decline, “that has tracked the deceleration of its sales growth from 10% in 2015 to an estimated 4.4% this year,” reads the research note. Over that period, analysts argue that Nike has shown “little in the way of progress as it relates to its stale innovation pipeline.” All that alongside a fast comeback by German rival Adidas has caused “panic” internally at Nike, according to the investment firm’s industry contacts. As a result, Nike has become even more promotional this quarter, write the analysts, indicating that more of its footwear platforms have slowed down.

“As we head into the company's FQ1 report on Tuesday, September 26 and then its Analyst Day event in late October, we remain cautious on the stock as we believe expectations for these events must be tempered, particularly the 2020 goal of hitting $50B in sales,” concluded Canaccord. (See also: Amazon Deal Won’t Fix Nike's Deeper Issues: NPD.)

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