When looking back at the past 24 months, investors have so much to cheer about. The S&P 500 is up 51% during that time, thanks to a resilient economic backdrop, solid financial results, and heightened investor optimism.

But not all companies are benefiting. As of Jan. 9, there's one consumer discretionary stock that trades a disheartening 60% below its peak from over three years ago. It's close to its 52-week low, indicating bearish sentiment from the investment community.

Don't let that discourage you, though. In fact, there are three reasons this beaten-down business presents a no-brainer buying opportunity in 2025 for patient and long-term-oriented investors.

Dominant position

Despite the stock's poor performance, investors should consider adding Nike (NKE -0.13%) to their portfolios. This is the clear leader in the global athletic footwear and apparel industry, with a 16.4% market share.

To be clear, the company has had its fair share of challenges lately that have resulted in lower revenue and net income. Prior management put less emphasis on brick-and-mortar retailer partnerships, while also leaning too heavily into shoe styles that focused more on fashion instead of sports.

However, Nike's brand, which is certainly powerful on a worldwide stage, is its main competitive advantage. Driven by an exceptional ability to tell captivating stories that resonate with customers who want to associate with a winning attitude, the business has been relevant for decades. It also helps Nike's cause that it partners with top athletes and major professional sports leagues, which broadens its exposure to fans everywhere.

Leadership change

Elliott Hill, who spent 32 years at Nike rising from intern to President of Consumer and Marketplace before retiring in 2020, is the new CEO of the company. On the one hand, a leadership change always adds a level of uncertainty that investors might not like. On the other hand, though, a fresh perspective is exactly what Nike needs to get back on track.

One area of focus will be to win back wholesale accounts. Customers still like to shop in person, something that became obvious when the economy got back to normal following the pandemic lockdowns. Seeing, touching, and trying on products is still valuable. Nike should want to meet these shoppers where they are, which is not just online, but also at physical retailers.

Another priority is product innovation. Introducing new styles that draw consumer interest is the name of the game in this industry. It won't be an easy task for Hill. People's tastes are always changing, and competition isn't letting up. But Nike has stood the test of time.

Cheap valuation

It shouldn't be a surprise that, because Nike's financials have taken a hit (sales and net income down 8% and 26%, respectively, in the second quarter of fiscal 2025), the market's perception hasn't been positive. That explains why the stock is down 60% since November 2021. Investors have lost their confidence in the sportswear leader.

This is a perfect situation where it's worthwhile to be contrarian. I believe Nike presents an attractive buying opportunity for patient and long-term investors.

As of this writing, shares trade at a price-to-earnings (P/E) ratio of 22.1. On the surface, this might not look like a bargain at all. But consider that the average P/E multiple for the stock in the past decade is 37.5. What's more, Nike's earnings per share (EPS) of $3.30 in the past 12 months are actually lower year over year.

So, the valuation ratio is down, as is EPS. To me, this clearly indicates a severely discounted situation for prospective investors. Nike's turnaround isn't going to happen overnight. It will take time for Hill to fix things and get back to solid revenue and profit growth. However, I believe the current opportunity to buy a stake in an industry-leading company with a powerful brand is too hard to ignore.