NIKE INC -CL B (NKE)

US6541061031 - Common Stock

73.42  +0.03 (+0.04%)

After market: 73.4499 +0.03 (+0.04%)

Fundamental Rating

7

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. Both the health and profitability get an excellent rating, making NKE a very profitable company, without any liquidiy or solvency issues. NKE is valied quite expensively at the moment, while it does show a decent growth rate. This makes NKE very considerable for quality investing!



8

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 4 of the past 5 years.

1.2 Ratios

With an excellent Return On Assets value of 14.00%, NKE belongs to the best of the industry, outperforming 91.84% of the companies in the same industry.
NKE's Return On Equity of 36.77% is amongst the best of the industry. NKE outperforms 91.84% of its industry peers.
NKE has a better Return On Invested Capital (17.62%) than 87.76% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 10.34%.
Industry RankSector Rank
ROA 14%
ROE 36.77%
ROIC 17.62%
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

The Profit Margin of NKE (10.14%) is better than 85.71% of its industry peers.
In the last couple of years the Profit Margin of NKE has grown nicely.
The Operating Margin of NKE (11.61%) is better than 83.67% of its industry peers.
NKE's Operating Margin has been stable in the last couple of years.
NKE has a Gross Margin of 44.30%. This is comparable to the rest of the industry: NKE outperforms 40.82% of its industry peers.
NKE's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 11.61%
PM (TTM) 10.14%
GM 44.3%
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%

8

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.
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 5.33 indicates that NKE is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.33, NKE belongs to the best of the industry, outperforming 87.76% of the companies in the same industry.
NKE has a debt to FCF ratio of 1.44. This is a very positive value and a sign of high solvency as it would only need 1.44 years to pay back of all of its debts.
NKE's Debt to FCF ratio of 1.44 is fine compared to the rest of the industry. NKE outperforms 71.43% of its industry peers.
A Debt/Equity ratio of 0.63 indicates that NKE is somewhat dependend on debt financing.
The Debt to Equity ratio of NKE (0.63) is worse than 69.39% of its industry peers.
Even though the debt/equity ratio score it not favorable for NKE, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
Industry RankSector Rank
Debt/Equity 0.63
Debt/FCF 1.44
Altman-Z 5.33
ROIC/WACC2.03
WACC8.68%

2.3 Liquidity

A Current Ratio of 2.74 indicates that NKE has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.74, NKE is in the better half of the industry, outperforming 63.27% of the companies in the same industry.
NKE has a Quick Ratio of 1.89. 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 (1.89) is better than 73.47% of its industry peers.
Industry RankSector Rank
Current Ratio 2.74
Quick Ratio 1.89

5

3. Growth

3.1 Past

NKE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.10%, which is quite good.
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.
The Revenue has been growing slightly by 0.28% 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)16.1%
EPS 3Y1.75%
EPS 5Y8.53%
EPS Q2Q%53.03%
Revenue 1Y (TTM)0.28%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-1.71%

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 11.15% yearly.
Based on estimates for the next years, NKE will show a small growth in Revenue. The Revenue will grow by 5.04% on average per year.
EPS Next Y6.04%
EPS Next 2Y9.34%
EPS Next 3Y8.71%
EPS Next 5Y11.15%
Revenue Next Year1.42%
Revenue Next 2Y3.68%
Revenue Next 3Y4.53%
Revenue Next 5Y5.04%

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 accelerating.
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.

3

4. Valuation

4.1 Price/Earnings Ratio

NKE is valuated rather expensively with a Price/Earnings ratio of 19.58.
NKE's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 29.15. NKE is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 18.46, the valuation of NKE can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NKE is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of NKE to the average of the S&P500 Index (20.65), we can say NKE is valued inline with the index average.
Industry RankSector Rank
PE 19.58
Fwd PE 18.46

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, NKE is valued a bit more expensive than the industry average as 61.22% of the companies are valued more cheaply.
The rest of the industry has a similar Price/Free Cash Flow ratio as NKE.
Industry RankSector Rank
P/FCF 17.89
EV/EBITDA 15.67

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
NKE has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.24
PEG (5Y)2.29
EPS Next 2Y9.34%
EPS Next 3Y8.71%

6

5. Dividend

5.1 Amount

NKE has a Yearly Dividend Yield of 2.02%. Purely for dividend investing, there may be better candidates out there.
The stock price of NKE dropped by -20.20% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
NKE's Dividend Yield is a higher than the industry average which is at 2.87.
Compared to an average S&P500 Dividend Yield of 2.35, NKE has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.02%

5.2 History

The dividend of NKE is nicely growing with an annual growth rate of 11.10%!
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)11.1%
Div Incr Years22
Div Non Decr Years33

5.3 Sustainability

40.78% 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 around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP40.78%
EPS Next 2Y9.34%
EPS Next 3Y8.71%

NIKE INC -CL B

NYSE:NKE (7/12/2024, 7:04:00 PM)

After market: 73.4499 +0.03 (+0.04%)

73.42

+0.03 (+0.04%)

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 Cap110.82B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.02%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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Revenue beat(2)
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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 RankSector Rank
PE 19.58
Fwd PE 18.46
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)3.24
PEG (5Y)2.29
Profitability
Industry RankSector Rank
ROA 14%
ROE 36.77%
ROCE
ROIC
ROICexc
ROICexgc
OM 11.61%
PM (TTM) 10.14%
GM 44.3%
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 Turnover1.38
Health
Industry RankSector Rank
Debt/Equity 0.63
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 2.74
Quick Ratio 1.89
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)16.1%
EPS 3Y1.75%
EPS 5Y
EPS Q2Q%
EPS Next Y6.04%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.28%
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