While the S 500 sits near record highs, a well-known company like (NYSE: NKE) has disappointed its investors mightily. Shares currently trade 58% off their peak price from November 2021. And they have declined 16% in the past five years (as of July 30).

But the opportunity might be too hard to pass up, especially since this consumer discretionary stock sells for a price-to-earnings ratio of 19.8, virtually its cheapest level in the past decade. Before you rush to buy Nike shares, however, don't forget these three top risks facing the business.

The first risk that's always present for Nike deals with the industry setup. The market for selling clothing and shoes has almost no barriers to entry. An entrepreneur that has capital can come up with an idea and designs and start selling their products online or in stores.

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Source Fool.com