adidas: A Beaten-Down Champion Poised For Another Run

Adidas (OTCQX:ADDYY) is highlighted as a potentially undervalued long-term investment, trading 36% below its 52-week high. Despite mixed Q3 '25 results, which saw strong performance in Europe and Latin America but weakness in North America and footwear, management has raised guidance for mid-to-high single-digit growth, supported by an intrinsic value above €200, though risks like U.S. tariffs persist.

Analysis

Adidas (OTCQX:ADDYY) is currently perceived as an undervalued long-term investment opportunity, having declined 36% from its 52-week high. The company's Q3 '25 results presented a mixed performance, demonstrating strong growth in Europe and Latin America, yet facing persistent challenges in the North American market and within its footwear sales segment. This indicates a bifurcated regional performance impacting overall growth.

Despite these regional disparities, management has raised its guidance, projecting mid-to-high single-digit growth, signaling optimism for future performance. This positive outlook is supported by an intrinsic value assessment exceeding €200 per share. However, key risks to this trajectory include potential impacts from U.S. tariffs and broader concerns regarding rising global physical inactivity.

The analyst's assessment suggests Adidas is a sound investment for those with a higher tolerance for volatility, given its current valuation and management's forward-looking statements. The raised guidance, coupled with the intrinsic value estimate, underpins a moderately positive sentiment despite identified market headwinds and regional weaknesses.

Key Decisions for Investors

• Consider Adidas (ADDYY) for a long-term investment, acknowledging its current valuation 36% below its 52-week high and an intrinsic value estimate above €200.
• Monitor Adidas's performance in the North American market and footwear segment closely, as these areas present ongoing challenges despite overall positive guidance.
• Evaluate the impact of potential U.S. tariffs and global physical inactivity trends on Adidas's future growth prospects, as these are identified risks to the company's outlook.