NIKE INC -CL B (NKE) Stock Fundamental Analysis
NYSE:NKE - New York Stock Exchange, Inc. - US6541061031 - Common Stock - Currency: USD
Taking everything into account, NKE scores 6 out of 10 in our fundamental rating. NKE was compared to 49 industry peers in the Textiles, Apparel & Luxury Goods industry. NKE has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. NKE has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year NKE was profitable.
NKE had a positive operating cash flow in the past year.
Each year in the past 5 years NKE has been profitable.
NKE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NKE has a better Return On Assets (11.93%) than 85.71% of its industry peers.
With an excellent Return On Equity value of 32.18%, NKE belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
NKE's Return On Invested Capital of 16.66% is fine compared to the rest of the industry. NKE outperforms 79.59% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NKE is significantly above the industry average of 13.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.93% | ||
| ROE | 32.18% | ||
| ROIC | 16.66% |
ROA(3y)14.49%
ROA(5y)13.35%
ROE(3y)38.42%
ROE(5y)38.33%
ROIC(3y)18.84%
ROIC(5y)17.81%
1.3 Margins
NKE has a Profit Margin of 9.43%. This is in the better half of the industry: NKE outperforms 79.59% of its industry peers.
NKE's Profit Margin has improved in the last couple of years.
NKE's Operating Margin of 11.10% is fine compared to the rest of the industry. NKE outperforms 77.55% of its industry peers.
NKE's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 43.82%, NKE is doing worse than 61.22% of the companies in the same industry.
NKE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.1% | ||
| PM (TTM) | 9.43% | ||
| GM | 43.82% |
OM growth 3Y-6.89%
OM growth 5Y1.32%
PM growth 3Y-4.79%
PM growth 5Y1.5%
GM growth 3Y-0.25%
GM growth 5Y-0.05%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NKE is creating value.
NKE has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, NKE has less shares outstanding
NKE has a better debt/assets ratio than last year.
2.2 Solvency
NKE has an Altman-Z score of 4.26. This indicates that NKE is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.26, NKE is doing good in the industry, outperforming 79.59% of the companies in the same industry.
The Debt to FCF ratio of NKE is 1.69, which is an excellent value as it means it would take NKE, only 1.69 years of fcf income to pay off all of its debts.
NKE has a better Debt to FCF ratio (1.69) than 77.55% of its industry peers.
NKE has a Debt/Equity ratio of 0.57. This is a neutral value indicating NKE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.57, NKE is not doing good in the industry: 61.22% of the companies in the same industry are doing better.
Although NKE does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.69 | ||
| Altman-Z | 4.26 |
ROIC/WACC1.74
WACC9.58%
2.3 Liquidity
NKE has a Current Ratio of 2.19. This indicates that NKE is financially healthy and has no problem in meeting its short term obligations.
NKE has a Current ratio of 2.19. This is in the better half of the industry: NKE outperforms 63.27% of its industry peers.
NKE has a Quick Ratio of 1.52. This is a normal value and indicates that NKE is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.52, NKE is in the better half of the industry, outperforming 73.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.52 |
3. Growth
3.1 Past
The earnings per share for NKE have decreased strongly by -10.88% in the last year.
Measured over the past years, NKE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.53% on average per year.
Looking at the last year, NKE shows a decrease in Revenue. The Revenue has decreased by -7.30% in the last year.
NKE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.60% yearly.
EPS 1Y (TTM)-10.88%
EPS 3Y1.75%
EPS 5Y8.53%
EPS Q2Q%-29.87%
Revenue 1Y (TTM)-7.3%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-9.33%
3.2 Future
NKE is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.45% yearly.
The Revenue is expected to grow by 0.76% on average over the next years.
EPS Next Y-42.71%
EPS Next 2Y-27.04%
EPS Next 3Y-10.75%
EPS Next 5Y3.45%
Revenue Next Year-11.18%
Revenue Next 2Y-6.4%
Revenue Next 3Y-2.52%
Revenue Next 5Y0.76%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 18.73 indicates a rather expensive valuation of NKE.
The rest of the industry has a similar Price/Earnings ratio as NKE.
When comparing the Price/Earnings ratio of NKE to the average of the S&P500 Index (27.85), we can say NKE is valued slightly cheaper.
The Price/Forward Earnings ratio is 28.43, which means the current valuation is very expensive for NKE.
65.31% of the companies in the same industry are cheaper than NKE, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.77, NKE is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.73 | ||
| Fwd PE | 28.43 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NKE is valued a bit more expensive than 63.27% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NKE is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.77 | ||
| EV/EBITDA | 13.16 |
4.3 Compensation for Growth
NKE has a very decent profitability rating, which may justify a higher PE ratio.
NKE's earnings are expected to decrease with -10.75% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.2
EPS Next 2Y-27.04%
EPS Next 3Y-10.75%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.74%, NKE has a reasonable but not impressive dividend return.
In the last 3 months the price of NKE has falen by -26.19%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 4.06, NKE pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, NKE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
The dividend of NKE is nicely growing with an annual growth rate of 11.20%!
NKE has paid a dividend for at least 10 years, which is a reliable track record.
NKE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.2%
Div Incr Years23
Div Non Decr Years34
5.3 Sustainability
NKE pays out 50.33% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NKE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP50.33%
EPS Next 2Y-27.04%
EPS Next 3Y-10.75%
56.76
+0.36 (+0.64%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners82.7%
Inst Owner Change0.1%
Ins Owners0.95%
Ins Owner Change17.73%
Market Cap83.78B
Analysts72.56
Price Target77.46 (36.47%)
Short Float %4.36%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
Yearly Dividend1.43
Dividend Growth(5Y)11.2%
DP50.33%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)52.71%
Min EPS beat(2)21.88%
Max EPS beat(2)83.55%
EPS beat(4)4
Avg EPS beat(4)39.67%
Min EPS beat(4)19.98%
Max EPS beat(4)83.55%
EPS beat(8)7
Avg EPS beat(8)25.67%
EPS beat(12)11
Avg EPS beat(12)24.12%
EPS beat(16)15
Avg EPS beat(16)26.57%
Revenue beat(2)2
Avg Revenue beat(2)1.12%
Min Revenue beat(2)0.86%
Max Revenue beat(2)1.38%
Revenue beat(4)2
Avg Revenue beat(4)-0.51%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)1.38%
Revenue beat(8)4
Avg Revenue beat(8)-0.44%
Revenue beat(12)8
Avg Revenue beat(12)0.91%
Revenue beat(16)10
Avg Revenue beat(16)1.3%
PT rev (1m)-12.89%
PT rev (3m)-13.66%
EPS NQ rev (1m)-0.4%
EPS NQ rev (3m)-84.89%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-22.02%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)-11.47%
Revenue NY rev (1m)-0.29%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.73 | ||
| Fwd PE | 28.43 | ||
| P/S | 1.75 | ||
| P/FCF | 15.77 | ||
| P/OCF | 14.31 | ||
| P/B | 5.98 | ||
| P/tB | 6.2 | ||
| EV/EBITDA | 13.16 |
EPS(TTM)3.03
EY5.34%
EPS(NY)2
Fwd EY3.52%
FCF(TTM)3.6
FCFY6.34%
OCF(TTM)3.97
OCFY6.99%
SpS32.4
BVpS9.49
TBVpS9.15
PEG (NY)N/A
PEG (5Y)2.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.93% | ||
| ROE | 32.18% | ||
| ROCE | 19.97% | ||
| ROIC | 16.66% | ||
| ROICexc | 27.35% | ||
| ROICexgc | 28.22% | ||
| OM | 11.1% | ||
| PM (TTM) | 9.43% | ||
| GM | 43.82% | ||
| FCFM | 11.11% |
ROA(3y)14.49%
ROA(5y)13.35%
ROE(3y)38.42%
ROE(5y)38.33%
ROIC(3y)18.84%
ROIC(5y)17.81%
ROICexc(3y)32.19%
ROICexc(5y)31.11%
ROICexgc(3y)33.27%
ROICexgc(5y)32.18%
ROCE(3y)22.6%
ROCE(5y)21.38%
ROICexcg growth 3Y-5.31%
ROICexcg growth 5Y-0.47%
ROICexc growth 3Y-5.19%
ROICexc growth 5Y-0.31%
OM growth 3Y-6.89%
OM growth 5Y1.32%
PM growth 3Y-4.79%
PM growth 5Y1.5%
GM growth 3Y-0.25%
GM growth 5Y-0.05%
F-Score5
Asset Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.69 | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 66.63% | ||
| Cap/Sales | 1.14% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 95.64% | ||
| Profit Quality | 117.81% | ||
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.52 | ||
| Altman-Z | 4.26 |
F-Score5
WACC9.58%
ROIC/WACC1.74
Cap/Depr(3y)99.75%
Cap/Depr(5y)107.42%
Cap/Sales(3y)1.7%
Cap/Sales(5y)1.91%
Profit Quality(3y)95.15%
Profit Quality(5y)88.93%
High Growth Momentum
Growth
EPS 1Y (TTM)-10.88%
EPS 3Y1.75%
EPS 5Y8.53%
EPS Q2Q%-29.87%
EPS Next Y-42.71%
EPS Next 2Y-27.04%
EPS Next 3Y-10.75%
EPS Next 5Y3.45%
Revenue 1Y (TTM)-7.3%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-9.33%
Revenue Next Year-11.18%
Revenue Next 2Y-6.4%
Revenue Next 3Y-2.52%
Revenue Next 5Y0.76%
EBIT growth 1Y-11.36%
EBIT growth 3Y-2.36%
EBIT growth 5Y6.99%
EBIT Next Year-34.37%
EBIT Next 3Y-7.4%
EBIT Next 5Y4.41%
FCF growth 1Y39.87%
FCF growth 3Y3.54%
FCF growth 5Y6.7%
OCF growth 1Y23.53%
OCF growth 3Y3.73%
OCF growth 5Y4.71%