NIKE INC -CL B (NKE)
US6541061031 - Common Stock
We assign a fundamental rating of 6 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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NKE was profitable.
NKE had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 14.00%, NKE belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
NKE has a better Return On Equity (36.77%) than 94.00% of its industry peers.
NKE has a Return On Invested Capital of 18.24%. This is amongst the best in the industry. NKE outperforms 92.00% of its industry peers.
NKE had an Average Return On Invested Capital over the past 3 years of 19.88%. This is significantly above the industry average of 10.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14% | ||
| ROE | 36.77% | ||
| ROIC | 18.24% |
ROA(3y)14.56%
ROA(5y)13.75%
ROE(3y)40.21%
ROE(5y)39.34%
ROIC(3y)19.88%
ROIC(5y)19.43%
1.3 Margins
Looking at the Profit Margin, with a value of 10.14%, NKE belongs to the top 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.
The Operating Margin of NKE (11.61%) is better than 82.00% of its industry peers.
In the last couple of years the Operating Margin of NKE has remained more or less at the same level.
The Gross Margin of NKE (44.30%) is comparable to the rest of the industry.
NKE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.61% | ||
| PM (TTM) | 10.14% | ||
| GM | 44.3% |
OM growth 3Y11.51%
OM growth 5Y-1.11%
PM growth 3Y13.4%
PM growth 5Y13.26%
GM growth 3Y0.08%
GM growth 5Y-0.14%
2. Health
2.1 Basic Checks
NKE has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for NKE is higher compared to a year ago.
2.2 Solvency
NKE has an Altman-Z score of 5.99. This indicates that NKE is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.99, NKE belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
The Debt to FCF ratio of NKE is 1.44, which is an excellent value as it means it would take NKE, only 1.44 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.44, NKE is doing good in the industry, outperforming 68.00% of the companies in the same industry.
A Debt/Equity ratio of 0.63 indicates that NKE is somewhat dependend on debt financing.
NKE's Debt to Equity ratio of 0.63 is on the low side compared to the rest of the industry. NKE is outperformed by 66.00% 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 | 0.63 | ||
| Debt/FCF | 1.44 | ||
| Altman-Z | 5.99 |
ROIC/WACC2.02
WACC9.02%
2.3 Liquidity
NKE has a Current Ratio of 2.74. This indicates that NKE is financially healthy and has no problem in meeting 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 64.00% 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.
NKE's Quick ratio of 1.89 is fine compared to the rest of the industry. NKE outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.74 | ||
| Quick Ratio | 1.89 |
3. Growth
3.1 Past
NKE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.02%.
NKE shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.12% yearly.
The Revenue has been growing slightly by 1.89% in the past year.
Measured over the past years, NKE shows a small growth in Revenue. The Revenue has been growing by 7.07% on average per year.
EPS 1Y (TTM)-2.02%
EPS 3Y20.85%
EPS 5Y6.12%
EPS growth Q2Q-2.53%
Revenue 1Y (TTM)1.89%
Revenue growth 3Y11.05%
Revenue growth 5Y7.07%
Revenue growth Q2Q0.31%
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 14.40% yearly.
NKE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.63% yearly.
EPS Next Y12%
EPS Next 2Y11.35%
EPS Next 3Y11.71%
EPS Next 5Y14.4%
Revenue Next Year1.39%
Revenue Next 2Y1.51%
Revenue Next 3Y2.97%
Revenue Next 5Y6.63%
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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 27.18, NKE can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of NKE is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.06, NKE is valued at the same level.
Based on the Price/Forward Earnings ratio of 23.08, the valuation of NKE can be described as rather expensive.
NKE's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 20.72. NKE is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.18 | ||
| Fwd PE | 23.08 |
4.2 Price Multiples
60.00% of the companies in the same industry are cheaper than NKE, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NKE indicates a slightly more expensive valuation: NKE is more expensive than 62.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.51 | ||
| EV/EBITDA | 19.4 |
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)2.27
PEG (5Y)4.44
EPS Next 2Y11.35%
EPS Next 3Y11.71%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.58%, NKE has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.90, NKE pays a bit more dividend than its industry peers.
NKE's Dividend Yield is slightly below the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
5.2 History
The dividend of NKE is nicely growing with an annual growth rate of 11.10%!
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)11.1%
Div Incr Years15
Div Non Decr Years15
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, but earnings are growing more, so the dividend growth is sustainable.
DP40.78%
EPS Next 2Y11.35%
EPS Next 3Y11.71%
NIKE INC -CL B
NYSE:NKE (5/2/2024, 7:09:47 PM)
After market: 92.45 +0.04 (+0.04%)92.41
+2.07 (+2.29%)
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 Cap139.48B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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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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 | 27.18 | ||
| Fwd PE | 23.08 | ||
| 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)2.27
PEG (5Y)4.44
Profitability
| Industry Rank | Sector 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 Rank | Sector 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)
Growth
EPS 1Y (TTM)-2.02%
EPS 3Y20.85%
EPS 5Y
EPS growth Q2Q
EPS Next Y12%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.89%
Revenue growth 3Y11.05%
Revenue growth 5Y
Revenue growth 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