NIKE INC -CL B (NKE)
US6541061031 - Common Stock
We assign a fundamental rating of 7 out of 10 to NKE. NKE was compared to 50 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. While showing a medium growth rate, NKE is valued expensive at the moment. These ratings could make NKE a good candidate for quality investing.
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.
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 has a Return On Assets of 14.00%. This is amongst the best in the industry. NKE outperforms 90.00% of its industry peers.
NKE has a Return On Equity of 38.02%. This is amongst the best in the industry. NKE outperforms 92.00% of its industry peers.
NKE's Return On Invested Capital of 19.27% is amongst the best of the industry. NKE outperforms 88.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 11.90%.
The last Return On Invested Capital (19.27%) for NKE is above the 3 year average (18.84%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14% | ||
| ROE | 38.02% | ||
| ROIC | 19.27% |
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 10.60%, NKE belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
NKE's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 12.59%, NKE belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
NKE's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 44.84%, NKE perfoms like the industry average, outperforming 42.00% of the companies in the same industry.
In the last couple of years the Gross Margin of NKE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.59% | ||
| PM (TTM) | 10.6% | ||
| GM | 44.84% |
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.
Compared to 1 year ago, NKE has less shares outstanding
Compared to 5 years ago, NKE has less shares outstanding
The debt/assets ratio for NKE has been reduced compared to a year ago.
2.2 Solvency
NKE has an Altman-Z score of 5.38. This indicates that NKE is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NKE (5.38) is better than 86.00% of its industry peers.
The Debt to FCF ratio of NKE is 1.25, which is an excellent value as it means it would take NKE, only 1.25 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.25, NKE is in the better half of the industry, outperforming 76.00% of the companies in the same industry.
A Debt/Equity ratio of 0.57 indicates that NKE is somewhat dependend on debt financing.
NKE has a Debt to Equity ratio of 0.57. This is in the lower half of the industry: NKE underperforms 60.00% 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 | 0.57 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 5.38 |
ROIC/WACC2.3
WACC8.37%
2.3 Liquidity
NKE has a Current Ratio of 2.36. This indicates that NKE is financially healthy and has no problem in meeting its short term obligations.
With a Current ratio value of 2.36, NKE perfoms like the industry average, outperforming 58.00% of the companies in the same industry.
NKE has a Quick Ratio of 1.58. 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 1.58. This is in the better half of the industry: NKE outperforms 74.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.36 | ||
| Quick Ratio | 1.58 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.33% over the past year.
NKE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.53% yearly.
The Revenue has decreased by -2.83% in the past 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)8.33%
EPS 3Y1.75%
EPS 5Y8.53%
EPS Q2Q%-25.53%
Revenue 1Y (TTM)-2.83%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-10.43%
3.2 Future
The Earnings Per Share is expected to grow by 11.15% on average over the next years. This is quite good.
Based on estimates for the next years, NKE will show a small growth in Revenue. The Revenue will grow by 5.06% on average per year.
EPS Next Y-16.54%
EPS Next 2Y-2.11%
EPS Next 3Y1.44%
EPS Next 5Y11.15%
Revenue Next Year-5.5%
Revenue Next 2Y-0.51%
Revenue Next 3Y1.52%
Revenue Next 5Y5.06%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.21, NKE is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of NKE is on the same level as its industry peers.
NKE's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 31.46.
With a Price/Forward Earnings ratio of 22.67, NKE is valued on the expensive side.
NKE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. NKE is more expensive than 60.00% of the companies in the same industry.
NKE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.21 | ||
| Fwd PE | 22.67 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NKE is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as NKE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.82 | ||
| EV/EBITDA | 16.56 |
4.3 Compensation for Growth
NKE has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.72
EPS Next 2Y-2.11%
EPS Next 3Y1.44%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.77%, NKE has a reasonable but not impressive dividend return.
NKE's Dividend Yield is a higher than the industry average which is at 2.84.
NKE's Dividend Yield is comparable with the S&P500 average which is at 2.18.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
5.2 History
On average, the dividend of NKE grows each year by 11.20%, which is quite nice.
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 Years22
Div Non Decr Years33
5.3 Sustainability
41.56% of the earnings are spent on dividend by NKE. 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.
DP41.56%
EPS Next 2Y-2.11%
EPS Next 3Y1.44%
NIKE INC -CL B
NYSE:NKE (10/21/2024, 8:04:00 PM)
Premarket: 81.62 +0.14 (+0.17%)81.48
-1.44 (-1.74%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap121.28B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Min EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.21 | ||
| Fwd PE | 22.67 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)2.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14% | ||
| ROE | 38.02% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 12.59% | ||
| PM (TTM) | 10.6% | ||
| GM | 44.84% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.36 | ||
| Quick Ratio | 1.58 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)8.33%
EPS 3Y1.75%
EPS 5Y
EPS Q2Q%
EPS Next Y-16.54%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.83%
Revenue growth 3Y4.87%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y