NIKE INC -CL B (NKE) Stock Fundamental Analysis
NYSE:NKE - New York Stock Exchange, Inc. - US6541061031 - Common Stock - Currency: USD
NKE gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 48 industry peers in the Textiles, Apparel & Luxury Goods industry. Both the health and profitability get an excellent rating, making NKE a very profitable company, without any liquidiy or solvency issues. NKE does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
NKE had positive earnings in the past year.
NKE had a positive operating cash flow in the past year.
In the past 5 years NKE has always been profitable.
In the past 5 years NKE always reported a positive cash flow from operatings.
1.2 Ratios
NKE's Return On Assets of 11.93% is amongst the best of the industry. NKE outperforms 89.58% of its industry peers.
The Return On Equity of NKE (32.18%) is better than 87.50% of its industry peers.
NKE has a Return On Invested Capital of 16.66%. This is amongst the best in the industry. NKE outperforms 83.33% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 11.61%.
| 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
With an excellent Profit Margin value of 9.43%, NKE belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
In the last couple of years the Profit Margin of NKE has grown nicely.
NKE has a better Operating Margin (11.10%) than 72.92% of its industry peers.
In the last couple of years the Operating Margin of NKE has remained more or less at the same level.
NKE's Gross Margin of 43.82% is on the low side compared to the rest of the industry. NKE is outperformed by 64.58% of its industry peers.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NKE is creating value.
The number of shares outstanding for NKE has been reduced compared to 1 year ago.
The number of shares outstanding for NKE has been reduced compared to 5 years ago.
Compared to 1 year ago, NKE has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.53 indicates that NKE is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.53, NKE is in the better half of the industry, outperforming 77.08% 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.
With a decent Debt to FCF ratio value of 1.69, NKE is doing good in the industry, outperforming 72.92% of the companies in the same industry.
A Debt/Equity ratio of 0.57 indicates that 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: 64.58% 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 | 4.53 |
ROIC/WACC1.63
WACC10.23%
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 (2.19) which is comparable to the rest of the industry.
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.
The Quick ratio of NKE (1.52) is better than 68.75% of its industry peers.
| 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.
NKE shows a decrease in Revenue. In the last year, the revenue decreased by -7.30%.
Measured over the past years, NKE shows a small growth in Revenue. The Revenue has been growing by 5.60% on average per year.
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 0.79% on average over the next years.
EPS Next Y-42.62%
EPS Next 2Y-27.58%
EPS Next 3Y-11.19%
EPS Next 5Y3.45%
Revenue Next Year-11.13%
Revenue Next 2Y-6.41%
Revenue Next 3Y-2.52%
Revenue Next 5Y0.79%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
NKE is valuated rather expensively with a Price/Earnings ratio of 20.83.
NKE's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of NKE to the average of the S&P500 Index (26.55), we can say NKE is valued slightly cheaper.
A Price/Forward Earnings ratio of 32.09 indicates a quite expensive valuation of NKE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NKE indicates a slightly more expensive valuation: NKE is more expensive than 64.58% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of NKE to the average of the S&P500 Index (22.40), we can say NKE is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.83 | ||
| Fwd PE | 32.09 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NKE indicates a slightly more expensive valuation: NKE is more expensive than 64.58% of the companies listed in the same industry.
NKE's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.54 | ||
| EV/EBITDA | 14.87 |
4.3 Compensation for Growth
NKE has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as NKE's earnings are expected to decrease with -11.19% in the coming years.
PEG (NY)N/A
PEG (5Y)2.44
EPS Next 2Y-27.58%
EPS Next 3Y-11.19%
5. Dividend
5.1 Amount
NKE has a Yearly Dividend Yield of 2.55%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.68, NKE pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, NKE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
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
50.33% of the earnings are spent on dividend by NKE. This is a bit on the high side, but may be sustainable.
NKE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP50.33%
EPS Next 2Y-27.58%
EPS Next 3Y-11.19%
63.11
-0.76 (-1.19%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners82.7%
Inst Owner Change4.99%
Ins Owners0.95%
Ins Owner Change-0.77%
Market Cap93.15B
Analysts72
Price Target74.61 (18.22%)
Short Float %4.18%
Short Ratio2.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
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)-3.69%
PT rev (3m)-16.61%
EPS NQ rev (1m)0.75%
EPS NQ rev (3m)-59.54%
EPS NY rev (1m)0.15%
EPS NY rev (3m)1.99%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)-3.05%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.83 | ||
| Fwd PE | 32.09 | ||
| P/S | 1.95 | ||
| P/FCF | 17.54 | ||
| P/OCF | 15.91 | ||
| P/B | 6.65 | ||
| P/tB | 6.9 | ||
| EV/EBITDA | 14.87 |
EPS(TTM)3.03
EY4.8%
EPS(NY)1.97
Fwd EY3.12%
FCF(TTM)3.6
FCFY5.7%
OCF(TTM)3.97
OCFY6.28%
SpS32.4
BVpS9.49
TBVpS9.15
PEG (NY)N/A
PEG (5Y)2.44
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 | 4.53 |
F-Score5
WACC10.23%
ROIC/WACC1.63
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-42.62%
EPS Next 2Y-27.58%
EPS Next 3Y-11.19%
EPS Next 5Y3.45%
Revenue 1Y (TTM)-7.3%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-9.33%
Revenue Next Year-11.13%
Revenue Next 2Y-6.41%
Revenue Next 3Y-2.52%
Revenue Next 5Y0.79%
EBIT growth 1Y-11.36%
EBIT growth 3Y-2.36%
EBIT growth 5Y6.99%
EBIT Next Year-33.75%
EBIT Next 3Y-8.92%
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%