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Three S&P 500 Stocks Reported More Than 80% Below Their Highs: Could They Be Contrarian Buys?

An 80% drawdown is a screen, not a buy signal. Here is what the cited Nike and PG&E figures show, what remains unknown about PayPal, and how to test a contrarian thesis.
From TheFinanceBase Team6 min to read
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Nike, PayPal and PG&E were identified as more than 80% below their all-time highs in a Motley Fool article surfaced by Yahoo Finance on October 12, 2026. That dated screen is a starting point, not evidence that any of the shares are bargains: a steep fall can reflect a business that is still deteriorating. Nike’s latest reported results show both pressure and some improvement in margins; PG&E’s published earnings figures show higher first-quarter core EPS and reaffirmed guidance; current PayPal operating results are not established by the cited material. The evidence does not support a blanket buy verdict or a reliable ranking of the three.

What an 80% drawdown tells you—and what it does not

A share price that is down 80% from a peak is worth one-fifth of that peak. Returning from that level to the old high would require a fivefold price increase, or a 400% gain—not an 80% gain. That arithmetic explains why the figure is attention-grabbing, but it says nothing on its own about future returns.

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The October 12, 2026 article’s screen names Nike (NYSE: NKE), PayPal (NASDAQ: PYPL) and PG&E (NYSE: PCG). It is a point-in-time claim from a secondary-source article surfaced through Yahoo Finance, not a drawdown recalculated here from historical prices. Before acting on it, check each stock’s split-adjusted price history and the date and reference price used. An all-time high is a historical price marker; it is not an estimate of what the business is worth today.

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A contrarian case needs more than pessimism already reflected in a chart. It needs evidence that the reasons for the decline are easing, that the company can sustain or restore its earning power, and that the price offers compensation for the risks that remain. If the business keeps weakening, a stock can fall further regardless of how far it is already below its peak.

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What the available company figures show

Company Latest cited operating evidence What that evidence does not establish
Nike For fiscal first-quarter 2027, ended August 31, 2026, NIKE, Inc. reported revenue of $11.2 billion, down 4% year over year; gross margin of 42.8%, up 60 basis points; and diluted EPS of $0.48. Those figures do not show that revenue has returned to growth or establish that the shares are undervalued.
PayPal Not stated in the current company evidence cited for this article. Current revenue and earnings trends, guidance, risks and management’s recovery plans are not established here.
PG&E PG&E investor materials reported first-quarter 2026 non-GAAP core EPS of $0.43, compared with $0.33 in first-quarter 2025, and reaffirmed 2026 core EPS guidance of $1.64 to $1.66. These figures alone do not establish the company’s full risk profile, funding needs or valuation.

The figures are not directly comparable: Nike reports fiscal-quarter revenue, gross margin and diluted EPS, while PG&E’s cited figures are non-GAAP core EPS and guidance. PayPal should not be treated as a third, equally assessed case when current company results are not established in the cited material.

Nike: early signs to weigh against continuing weakness

Nike’s fiscal first-quarter 2027 results are mixed. Revenue declined 4% year over year, while gross margin improved 60 basis points to 42.8%. Weakness was uneven across the business: Nike Direct revenue fell 8% on a reported basis, or 9% currency-neutral, and Converse revenue fell 28%. Nike Brand declines were attributed primarily to Greater China and EMEA, partly offset by growth in North America. The company forecast fiscal 2027 revenue to decline at a high-single-digit rate.

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That outlook matters for a contrarian investor because a better margin in one quarter does not by itself offset falling sales or confirm that demand has turned. A recovery thesis would need evidence that Nike can stabilize its weaker regions and channels and improve results without relying only on cost reductions.

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Pace is a plan, not realized savings

Nike introduced Pace as an operating-model transformation intended to scale momentum in its performance business. The plan includes supply-chain modernization, geographic reorganization and further organizational streamlining. Management estimated cumulative savings of approximately $2.5 billion through fiscal 2031, alongside approximately $1.0 billion in pre-tax charges through that period. Nike also recognized $0.3 billion in severance in fiscal 2026. The company cautioned that actual savings and charges may differ materially from estimates.

Those estimates should be assessed as an execution plan with costs, not booked as guaranteed upside. Investors can track whether reported results demonstrate progress while also asking whether the restructuring is disrupting the business or whether weaker sales persist despite the changes. Nike’s CEO Elliott Hill said the company introduced Pace to help accelerate and scale momentum across Nike; that statement describes management’s rationale, not proof of an outcome.

PG&E: earnings guidance is only one part of the case

PG&E’s reported first-quarter core EPS rose from $0.33 in 2025 to $0.43 in 2026, and the company reaffirmed 2026 non-GAAP core EPS guidance of $1.64 to $1.66. Those figures offer a useful earnings reference, but they do not answer whether the stock is attractively priced or whether the earnings outlook adequately accounts for the risks and resources the business may require.

For a utility, a fuller assessment should examine current regulatory filings and earnings materials for wildfire exposure, regulatory recovery, capital requirements and funding. The cited earnings figures do not resolve those questions. Do not treat the guidance range as a complete measure of financial risk, or infer that an 80% decline has made the shares cheap.

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PayPal: do not fill the evidence gap with the chart

PayPal is named in the October 12 screen, but current operating results, management guidance and company-specific risks are not established in the cited material. That leaves essential parts of a contrarian assessment unanswered: whether revenue and earnings are stabilizing, what management expects next, and how the company’s financial position and valuation compare with a normalized business outlook. The drawdown alone cannot supply those answers.

A practical test before calling any of them a buy

Use the same questions for each company, but answer them with current company filings and an explicit valuation rather than with the headline percentage:

  • Verify the screen. Check the measurement date, the peak used and split-adjusted price history. Treat the reported drawdown as historical context, not an up-to-date market quote.
  • Check operating direction. Separate a one-quarter improvement from a sustained change in revenue, margins, cash generation and earnings. For Nike, examine whether performance in North America can coexist with improvement in weaker regions and businesses; for PayPal, first obtain current company results and guidance.
  • Test management’s plan. Identify the milestones, expected costs and timeline. For Nike’s Pace program, compare realized results with management’s savings and charge estimates rather than assuming the estimates will be achieved.
  • Read the risk disclosures. For PG&E, review current regulatory and wildfire disclosures as well as capital and funding needs. For every company, identify what could make earnings or cash flow worse than the recovery case assumes.
  • Value the business, not its old peak. Compare the current share price with a defensible estimate of normalized earnings or cash flow, and consider whether the balance sheet and remaining risks justify the assumptions. The cited figures do not provide comparable valuation calculations for these three stocks.
  • Write down what would disprove the thesis. Examples include continued sales declines, failure to deliver planned savings, guidance reductions, or risks that overwhelm expected earnings. If the evidence cannot distinguish stabilization from continued deterioration, the contrarian case is not yet demonstrated.

With the available figures, Nike presents a measurable but unresolved turnaround question, PG&E presents encouraging earnings comparisons that require a separate risk and valuation review, and PayPal cannot be assessed on current company evidence cited here. None can be classified as a good contrarian buy on the size of its reported decline alone.

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