NIKE INC -CL B (NKE) Stock Fundamental Analysis
NYSE:NKE - New York Stock Exchange, Inc. - US6541061031 - Common Stock - Currency: USD
Overall NKE gets a fundamental rating of 6 out of 10. We evaluated NKE against 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 valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
NKE had positive earnings in the past year.
In the past year NKE had a positive cash flow from operations.
Each year in the past 5 years NKE has been profitable.
NKE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 12.87%, NKE belongs to the best of the industry, outperforming 89.80% of the companies in the same industry.
NKE's Return On Equity of 34.81% is amongst the best of the industry. NKE outperforms 89.80% of its industry peers.
Looking at the Return On Invested Capital, with a value of 18.25%, NKE belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 11.76%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.87% | ||
| ROE | 34.81% | ||
| ROIC | 18.25% |
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 9.98%, NKE belongs to the best of the industry, outperforming 87.76% of the companies in the same industry.
NKE's Profit Margin has improved in the last couple of years.
NKE has a Operating Margin of 11.95%. This is amongst the best in the industry. NKE outperforms 83.67% of its industry peers.
In the last couple of years the Operating Margin of NKE has remained more or less at the same level.
NKE has a Gross Margin of 44.60%. This is comparable to the rest of the industry: NKE outperforms 42.86% of its industry peers.
NKE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.95% | ||
| PM (TTM) | 9.98% | ||
| GM | 44.6% |
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.
NKE has less shares outstanding than it did 1 year ago.
NKE has less shares outstanding than it did 5 years ago.
NKE has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.10 indicates that NKE is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.10, NKE belongs to the top of the industry, outperforming 83.67% of the companies in the same industry.
The Debt to FCF ratio of NKE is 1.64, which is an excellent value as it means it would take NKE, only 1.64 years of fcf income to pay off all of its debts.
NKE's Debt to FCF ratio of 1.64 is fine compared to the rest of the industry. NKE outperforms 71.43% of its industry peers.
A Debt/Equity ratio of 0.57 indicates that NKE is somewhat dependend on debt financing.
The Debt to Equity ratio of NKE (0.57) is worse than 61.22% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 5.1 |
ROIC/WACC1.84
WACC9.93%
2.3 Liquidity
A Current Ratio of 2.22 indicates that NKE has no problem at all paying its short term obligations.
NKE's Current ratio of 2.22 is fine compared to the rest of the industry. NKE outperforms 61.22% of its industry peers.
A Quick Ratio of 1.51 indicates that NKE should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.51, NKE is in the better half of the industry, outperforming 73.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.22 | ||
| Quick Ratio | 1.51 |
3. Growth
3.1 Past
The earnings per share for NKE have decreased by -4.68% in the last year.
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 decreased by -4.97% 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)-4.68%
EPS 3Y1.75%
EPS 5Y8.53%
EPS Q2Q%-24.27%
Revenue 1Y (TTM)-4.97%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-7.72%
3.2 Future
Based on estimates for the next years, NKE will show a small growth in Earnings Per Share. The EPS will grow by 1.75% on average per year.
Based on estimates for the next years, NKE will show a small growth in Revenue. The Revenue will grow by 1.18% on average per year.
EPS Next Y-43.75%
EPS Next 2Y-18.92%
EPS Next 3Y-6.49%
EPS Next 5Y1.75%
Revenue Next Year-10.89%
Revenue Next 2Y-4.74%
Revenue Next 3Y-1.37%
Revenue Next 5Y1.18%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 23.47, which indicates a rather expensive current valuation of NKE.
NKE's Price/Earnings is on the same level as the industry average.
NKE is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 31.03, the valuation of NKE can be described as expensive.
NKE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. NKE is more expensive than 67.35% of the companies in the same industry.
NKE is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.47 | ||
| Fwd PE | 31.03 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NKE is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.51 | ||
| EV/EBITDA | 16.68 |
4.3 Compensation for Growth
NKE has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as NKE's earnings are expected to decrease with -6.49% in the coming years.
PEG (NY)N/A
PEG (5Y)2.75
EPS Next 2Y-18.92%
EPS Next 3Y-6.49%
5. Dividend
5.1 Amount
NKE has a Yearly Dividend Yield of 2.19%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.88, NKE pays a bit more dividend than its industry peers.
NKE's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.19% |
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 Years23
Div Non Decr Years34
5.3 Sustainability
45.78% 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 the earnings are growing slower. This means the dividend growth is not sustainable.
DP45.78%
EPS Next 2Y-18.92%
EPS Next 3Y-6.49%
76.5
-0.73 (-0.95%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners83.67%
Inst Owner Change0.7%
Ins Owners0.67%
Ins Owner Change19.16%
Market Cap113.15B
Analysts73.49
Price Target89.5 (16.99%)
Short Float %2.49%
Short Ratio2.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.19% |
Yearly Dividend1.43
Dividend Growth(5Y)11.2%
DP45.78%
Div Incr Years23
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)27.57%
Min EPS beat(2)21.88%
Max EPS beat(2)33.27%
EPS beat(4)4
Avg EPS beat(4)19.68%
Min EPS beat(4)3.59%
Max EPS beat(4)33.27%
EPS beat(8)7
Avg EPS beat(8)20.56%
EPS beat(12)11
Avg EPS beat(12)18.91%
EPS beat(16)15
Avg EPS beat(16)22.4%
Revenue beat(2)1
Avg Revenue beat(2)-0.31%
Min Revenue beat(2)-1.47%
Max Revenue beat(2)0.86%
Revenue beat(4)2
Avg Revenue beat(4)-0.8%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)0.86%
Revenue beat(8)4
Avg Revenue beat(8)0.25%
Revenue beat(12)8
Avg Revenue beat(12)0.93%
Revenue beat(16)9
Avg Revenue beat(16)0.78%
PT rev (1m)-0.24%
PT rev (3m)-4.53%
EPS NQ rev (1m)-55.83%
EPS NQ rev (3m)-71.74%
EPS NY rev (1m)-23.44%
EPS NY rev (3m)-24.89%
Revenue NQ rev (1m)-5.25%
Revenue NQ rev (3m)-14.47%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-3.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.47 | ||
| Fwd PE | 31.03 | ||
| P/S | 2.31 | ||
| P/FCF | 20.51 | ||
| P/OCF | 18.49 | ||
| P/B | 8.06 | ||
| P/tB | 8.36 | ||
| EV/EBITDA | 16.68 |
EPS(TTM)3.26
EY4.26%
EPS(NY)2.47
Fwd EY3.22%
FCF(TTM)3.73
FCFY4.88%
OCF(TTM)4.14
OCFY5.41%
SpS33.11
BVpS9.49
TBVpS9.15
PEG (NY)N/A
PEG (5Y)2.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.87% | ||
| ROE | 34.81% | ||
| ROCE | 21.91% | ||
| ROIC | 18.25% | ||
| ROICexc | 28.72% | ||
| ROICexgc | 29.59% | ||
| OM | 11.95% | ||
| PM (TTM) | 9.98% | ||
| GM | 44.6% | ||
| FCFM | 11.27% |
ROA(3y)14.49%
ROA(5y)13.35%
ROE(3y)38.42%
ROE(5y)38.33%
ROIC(3y)18.84%
ROIC(5y)17.81%
ROICexc(3y)32.19%
ROICexc(5y)31.11%
ROICexgc(3y)33.27%
ROICexgc(5y)32.18%
ROCE(3y)22.6%
ROCE(5y)21.38%
ROICexcg growth 3Y-5.31%
ROICexcg growth 5Y-0.47%
ROICexc growth 3Y-5.19%
ROICexc growth 5Y-0.31%
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%
F-Score6
Asset Turnover1.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.64 | ||
| Debt/EBITDA | 1.2 | ||
| Cap/Depr | 71.79% | ||
| Cap/Sales | 1.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.44% | ||
| Profit Quality | 112.94% | ||
| Current Ratio | 2.22 | ||
| Quick Ratio | 1.51 | ||
| Altman-Z | 5.1 |
F-Score6
WACC9.93%
ROIC/WACC1.84
Cap/Depr(3y)99.75%
Cap/Depr(5y)107.42%
Cap/Sales(3y)1.7%
Cap/Sales(5y)1.91%
Profit Quality(3y)95.15%
Profit Quality(5y)88.93%
High Growth Momentum
Growth
EPS 1Y (TTM)-4.68%
EPS 3Y1.75%
EPS 5Y8.53%
EPS Q2Q%-24.27%
EPS Next Y-43.75%
EPS Next 2Y-18.92%
EPS Next 3Y-6.49%
EPS Next 5Y1.75%
Revenue 1Y (TTM)-4.97%
Revenue growth 3Y4.87%
Revenue growth 5Y5.6%
Sales Q2Q%-7.72%
Revenue Next Year-10.89%
Revenue Next 2Y-4.74%
Revenue Next 3Y-1.37%
Revenue Next 5Y1.18%
EBIT growth 1Y-3.43%
EBIT growth 3Y-2.36%
EBIT growth 5Y6.99%
EBIT Next Year-33.61%
EBIT Next 3Y-3.3%
EBIT Next 5Y3.14%
FCF growth 1Y209.65%
FCF growth 3Y3.54%
FCF growth 5Y6.7%
OCF growth 1Y128.57%
OCF growth 3Y3.73%
OCF growth 5Y4.71%