NIKE INC -CL B (NKE) Stock Fundamental Analysis
USA - NYSE:NKE - US6541061031 - Common Stock
70.93 USD
-0.35 (-0.49%)
71.01 USD
+0.08 (+0.11%)
Taking everything into account, NKE scores 6 out of 10 in our fundamental rating. NKE was compared to 48 industry peers in the Textiles, Apparel & Luxury Goods industry. NKE gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, NKE is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year NKE was profitable.
In the past year NKE had a positive cash flow from operations.
NKE had positive earnings in each of the past 5 years.
Each year in the past 5 years NKE had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NKE (8.80%) is better than 85.42% of its industry peers.
With an excellent Return On Equity value of 24.36%, NKE belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
NKE has a better Return On Invested Capital (11.95%) than 72.92% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NKE is above the industry average of 12.15%.
The last Return On Invested Capital (11.95%) for NKE is well below the 3 year average (16.64%), which needs to be investigated, but indicates that NKE had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.8% | ||
| ROE | 24.36% | ||
| ROIC | 11.95% |
ROA(3y)12.42%
ROA(5y)13.49%
ROE(3y)33.36%
ROE(5y)36.9%
ROIC(3y)16.64%
ROIC(5y)18.07%
1.3 Margins
NKE has a better Profit Margin (6.95%) than 83.33% of its industry peers.
NKE's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 7.99%, NKE is in the better half of the industry, outperforming 60.42% of the companies in the same industry.
In the last couple of years the Operating Margin of NKE has remained more or less at the same level.
With a Gross Margin value of 42.73%, NKE is not doing good in the industry: 60.42% of the companies in the same industry are doing better.
NKE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.99% | ||
| PM (TTM) | 6.95% | ||
| GM | 42.73% |
OM growth 3Y-17.6%
OM growth 5Y-0.82%
PM growth 3Y-18.72%
PM growth 5Y0.48%
GM growth 3Y-2.41%
GM growth 5Y-0.32%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), NKE is creating some value.
NKE has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, NKE has less shares outstanding
Compared to 1 year ago, NKE has an improved debt to assets ratio.
2.2 Solvency
NKE has an Altman-Z score of 4.70. This indicates that NKE is financially healthy and has little risk of bankruptcy at the moment.
NKE's Altman-Z score of 4.70 is amongst the best of the industry. NKE outperforms 85.42% of its industry peers.
The Debt to FCF ratio of NKE is 2.44, which is a good value as it means it would take NKE, 2.44 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.44, NKE is doing good in the industry, outperforming 79.17% of the companies in the same industry.
NKE has a Debt/Equity ratio of 0.60. This is a neutral value indicating NKE is somewhat dependend on debt financing.
NKE has a Debt to Equity ratio of 0.60. This is in the lower half of the industry: NKE underperforms 62.50% of its industry peers.
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 | 0.6 | ||
| Debt/FCF | 2.44 | ||
| Altman-Z | 4.7 |
ROIC/WACC1.15
WACC10.43%
2.3 Liquidity
NKE has a Current Ratio of 2.21. This indicates that NKE is financially healthy and has no problem in meeting its short term obligations.
NKE has a better Current ratio (2.21) than 66.67% of its industry peers.
NKE has a Quick Ratio of 1.50. This is a normal value and indicates that NKE is financially healthy and should not expect problems in meeting its short term obligations.
NKE has a Quick ratio of 1.50. This is amongst the best in the industry. NKE outperforms 85.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.5 |
3. Growth
3.1 Past
NKE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -42.40%.
Measured over the past 5 years, NKE shows a small growth in Earnings Per Share. The EPS has been growing by 3.37% on average per year.
NKE shows a decrease in Revenue. In the last year, the revenue decreased by -9.84%.
The Revenue has been growing slightly by 4.36% on average over the past years.
EPS 1Y (TTM)-42.4%
EPS 3Y-16.87%
EPS 5Y3.37%
EPS Q2Q%-86.14%
Revenue 1Y (TTM)-9.84%
Revenue growth 3Y-0.29%
Revenue growth 5Y4.36%
Sales Q2Q%-11.97%
3.2 Future
NKE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.32% yearly.
The Revenue is expected to grow by 4.40% on average over the next years.
EPS Next Y-22.31%
EPS Next 2Y6.8%
EPS Next 3Y11.69%
EPS Next 5Y16.32%
Revenue Next Year-0.13%
Revenue Next 2Y2.54%
Revenue Next 3Y3.48%
Revenue Next 5Y4.4%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 32.84, which means the current valuation is very expensive for NKE.
Based on the Price/Earnings ratio, NKE is valued a bit more expensive than 64.58% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.41, NKE is valued at the same level.
The Price/Forward Earnings ratio is 42.27, which means the current valuation is very expensive for NKE.
NKE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. NKE is more expensive than 68.75% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.87. NKE is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.84 | ||
| Fwd PE | 42.27 |
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 70.83% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as NKE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.06 | ||
| EV/EBITDA | 22.7 |
4.3 Compensation for Growth
The decent profitability rating of NKE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)9.74
EPS Next 2Y6.8%
EPS Next 3Y11.69%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.22%, NKE has a reasonable but not impressive dividend return.
NKE's Dividend Yield is a higher than the industry average which is at 3.09.
NKE's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
5.2 History
On average, the dividend of NKE grows each year by 10.70%, which is quite nice.
NKE has been paying a dividend for at least 10 years, so it has a reliable track record.
NKE has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.7%
Div Incr Years23
Div Non Decr Years34
5.3 Sustainability
NKE pays out 71.45% of its income as dividend. This is not a sustainable payout ratio.
The dividend of NKE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP71.45%
EPS Next 2Y6.8%
EPS Next 3Y11.69%
70.93
-0.35 (-0.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners84.88%
Inst Owner Change-1.13%
Ins Owners0.67%
Ins Owner Change1%
Market Cap104.76B
Analysts72.09
Price Target80.89 (14.04%)
Short Float %3.12%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend1.54
Dividend Growth(5Y)10.7%
DP71.45%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)45.52%
Min EPS beat(2)7.49%
Max EPS beat(2)83.55%
EPS beat(4)4
Avg EPS beat(4)36.55%
Min EPS beat(4)7.49%
Max EPS beat(4)83.55%
EPS beat(8)8
Avg EPS beat(8)26.91%
EPS beat(12)11
Avg EPS beat(12)23.86%
EPS beat(16)15
Avg EPS beat(16)21.98%
Revenue beat(2)2
Avg Revenue beat(2)1.92%
Min Revenue beat(2)1.38%
Max Revenue beat(2)2.46%
Revenue beat(4)3
Avg Revenue beat(4)0.8%
Min Revenue beat(4)-1.47%
Max Revenue beat(4)2.46%
Revenue beat(8)4
Avg Revenue beat(8)-0.24%
Revenue beat(12)8
Avg Revenue beat(12)1.09%
Revenue beat(16)10
Avg Revenue beat(16)0.77%
PT rev (1m)3.19%
PT rev (3m)9.84%
EPS NQ rev (1m)0.38%
EPS NQ rev (3m)-23.84%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.75%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.84 | ||
| Fwd PE | 42.27 | ||
| P/S | 2.26 | ||
| P/FCF | 32.06 | ||
| P/OCF | 28.33 | ||
| P/B | 7.93 | ||
| P/tB | 8.24 | ||
| EV/EBITDA | 22.7 |
EPS(TTM)2.16
EY3.05%
EPS(NY)1.68
Fwd EY2.37%
FCF(TTM)2.21
FCFY3.12%
OCF(TTM)2.5
OCFY3.53%
SpS31.36
BVpS8.95
TBVpS8.61
PEG (NY)N/A
PEG (5Y)9.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.8% | ||
| ROE | 24.36% | ||
| ROCE | 14.23% | ||
| ROIC | 11.95% | ||
| ROICexc | 18.43% | ||
| ROICexgc | 18.99% | ||
| OM | 7.99% | ||
| PM (TTM) | 6.95% | ||
| GM | 42.73% | ||
| FCFM | 7.06% |
ROA(3y)12.42%
ROA(5y)13.49%
ROE(3y)33.36%
ROE(5y)36.9%
ROIC(3y)16.64%
ROIC(5y)18.07%
ROICexc(3y)27.29%
ROICexc(5y)31.4%
ROICexgc(3y)28.17%
ROICexgc(5y)32.46%
ROCE(3y)19.82%
ROCE(5y)21.52%
ROICexcg growth 3Y-18.4%
ROICexcg growth 5Y0.36%
ROICexc growth 3Y-18.27%
ROICexc growth 5Y0.46%
OM growth 3Y-17.6%
OM growth 5Y-0.82%
PM growth 3Y-18.72%
PM growth 5Y0.48%
GM growth 3Y-2.41%
GM growth 5Y-0.32%
F-Score4
Asset Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 2.44 | ||
| Debt/EBITDA | 1.77 | ||
| Cap/Depr | 53.22% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 9.52 | ||
| Cash Conversion | 82% | ||
| Profit Quality | 101.52% | ||
| Current Ratio | 2.21 | ||
| Quick Ratio | 1.5 | ||
| Altman-Z | 4.7 |
F-Score4
WACC10.43%
ROIC/WACC1.15
Cap/Depr(3y)87.41%
Cap/Depr(5y)87.93%
Cap/Sales(3y)1.47%
Cap/Sales(5y)1.52%
Profit Quality(3y)104.57%
Profit Quality(5y)98.22%
High Growth Momentum
Growth
EPS 1Y (TTM)-42.4%
EPS 3Y-16.87%
EPS 5Y3.37%
EPS Q2Q%-86.14%
EPS Next Y-22.31%
EPS Next 2Y6.8%
EPS Next 3Y11.69%
EPS Next 5Y16.32%
Revenue 1Y (TTM)-9.84%
Revenue growth 3Y-0.29%
Revenue growth 5Y4.36%
Sales Q2Q%-11.97%
Revenue Next Year-0.13%
Revenue Next 2Y2.54%
Revenue Next 3Y3.48%
Revenue Next 5Y4.4%
EBIT growth 1Y-44.66%
EBIT growth 3Y-17.84%
EBIT growth 5Y3.51%
EBIT Next Year1.98%
EBIT Next 3Y19.07%
EBIT Next 5Y18.89%
FCF growth 1Y-50.61%
FCF growth 3Y-9.64%
FCF growth 5Y18.49%
OCF growth 1Y-50.22%
OCF growth 3Y-10.67%
OCF growth 5Y8.27%