NIKE INC -CL B (NKE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NKE - US6541061031 - Common Stock
65.04 USD
-0.42 (-0.64%)
64.8999 USD
-0.14 (-0.22%)
Overall NKE gets a fundamental rating of 5 out of 10. We evaluated NKE against 45 industry peers in the Textiles, Apparel & Luxury Goods industry. While NKE belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, NKE is valued expensive at the moment. NKE also has an excellent dividend rating. These ratings could make NKE a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
- In the past year NKE was profitable.
- NKE had a positive operating cash flow in the past year.
- In the past 5 years NKE has always been profitable.
- NKE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- NKE's Return On Assets of 6.68% is fine compared to the rest of the industry. NKE outperforms 77.78% of its industry peers.
- With a decent Return On Equity value of 17.92%, NKE is doing good in the industry, outperforming 77.78% of the companies in the same industry.
- The Return On Invested Capital of NKE (9.77%) is better than 73.33% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 11.59%.
- The 3 year average ROIC (16.64%) for NKE is well above the current ROIC(9.77%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.68% | ||
| ROE | 17.92% | ||
| ROIC | 9.77% |
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
- Looking at the Profit Margin, with a value of 5.43%, NKE is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
- NKE's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 6.54%, NKE is in line with its industry, outperforming 57.78% of the companies in the same industry.
- NKE's Operating Margin has been stable in the last couple of years.
- NKE's Gross Margin of 41.13% is on the low side compared to the rest of the industry. NKE is outperformed by 62.22% of its industry peers.
- 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 | 6.54% | ||
| PM (TTM) | 5.43% | ||
| GM | 41.13% |
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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so NKE is still creating some 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
- NKE has a debt to FCF ratio of 3.24. This is a good value and a sign of high solvency as NKE would need 3.24 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.24, NKE is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
- NKE has a Debt/Equity ratio of 0.50. This is a healthy value indicating a solid balance between debt and equity.
- NKE has a Debt to Equity ratio of 0.50. This is in the lower half of the industry: NKE underperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 3.24 | ||
| Altman-Z | N/A |
ROIC/WACC0.86
WACC11.39%
2.3 Liquidity
- A Current Ratio of 2.06 indicates that NKE has no problem at all paying its short term obligations.
- Looking at the Current ratio, with a value of 2.06, NKE is in line with its industry, outperforming 57.78% of the companies in the same industry.
- A Quick Ratio of 1.40 indicates that NKE should not have too much problems paying its short term obligations.
- With a decent Quick ratio value of 1.40, NKE is doing good in the industry, outperforming 71.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.06 | ||
| Quick Ratio | 1.4 |
3. Growth
3.1 Past
- The earnings per share for NKE have decreased strongly by -47.85% in the last year.
- 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.
- The Revenue has decreased by -5.03% in the past year.
- The Revenue has been growing slightly by 4.36% on average over the past years.
EPS 1Y (TTM)-47.85%
EPS 3Y-16.87%
EPS 5Y3.37%
EPS Q2Q%-32.05%
Revenue 1Y (TTM)-5.03%
Revenue growth 3Y-0.29%
Revenue growth 5Y4.36%
Sales Q2Q%0.59%
3.2 Future
- Based on estimates for the next years, NKE will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.53% on average per year.
- Based on estimates for the next years, NKE will show a small growth in Revenue. The Revenue will grow by 5.09% on average per year.
EPS Next Y-24.92%
EPS Next 2Y6.25%
EPS Next 3Y11.18%
EPS Next 5Y14.53%
Revenue Next Year1.63%
Revenue Next 2Y2.72%
Revenue Next 3Y3.23%
Revenue Next 5Y5.09%
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
- NKE is valuated quite expensively with a Price/Earnings ratio of 38.26.
- NKE's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.21. NKE is valued slightly more expensive when compared to this.
- A Price/Forward Earnings ratio of 26.67 indicates a quite expensive valuation of NKE.
- Based on the Price/Forward Earnings ratio, NKE is valued a bit more expensive than 62.22% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of NKE to the average of the S&P500 Index (24.26), we can say NKE is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.26 | ||
| Fwd PE | 26.67 |
4.2 Price Multiples
- NKE's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. NKE is more expensive than 73.33% of the companies in the same industry.
- NKE's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.85 | ||
| EV/EBITDA | 24.96 |
4.3 Compensation for Growth
- NKE has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)11.35
EPS Next 2Y6.25%
EPS Next 3Y11.18%
5. Dividend
5.1 Amount
- NKE has a Yearly Dividend Yield of 2.51%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.43, NKE pays a better dividend. On top of this NKE pays more dividend than 84.44% of the companies listed in the same industry.
- NKE's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
5.2 History
- On average, the dividend of NKE grows each year by 10.70%, which is quite nice.
- NKE has paid a dividend for at least 10 years, which is 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
- 94.06% of the earnings are spent on dividend by NKE. This is not a sustainable payout ratio.
- The dividend of NKE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP94.06%
EPS Next 2Y6.25%
EPS Next 3Y11.18%
NIKE INC -CL B / NKE FAQ
What is the fundamental rating for NKE stock?
ChartMill assigns a fundamental rating of 5 / 10 to NKE.
Can you provide the valuation status for NIKE INC -CL B?
ChartMill assigns a valuation rating of 2 / 10 to NIKE INC -CL B (NKE). This can be considered as Overvalued.
How profitable is NIKE INC -CL B (NKE) stock?
NIKE INC -CL B (NKE) has a profitability rating of 7 / 10.
What is the expected EPS growth for NIKE INC -CL B (NKE) stock?
The Earnings per Share (EPS) of NIKE INC -CL B (NKE) is expected to decline by -24.92% in the next year.
How sustainable is the dividend of NIKE INC -CL B (NKE) stock?
The dividend rating of NIKE INC -CL B (NKE) is 7 / 10 and the dividend payout ratio is 94.06%.