NIKE, Inc.
NIKE, Inc. Fundamental Analysis
NIKE, Inc. (NKE) shows weak financial fundamentals with a PE ratio of 38.24, profit margin of 5.43%, and ROE of 18.43%. The company generates $46.5B in annual revenue with weak year-over-year growth of 0.28%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 47.3/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze NKE's fundamental strength across five key dimensions:
Efficiency Score
WeakNKE struggles to generate sufficient returns from assets.
Valuation Score
ModerateNKE shows balanced valuation metrics.
Growth Score
ModerateNKE shows steady but slowing expansion.
Financial Health Score
ExcellentNKE maintains a strong and stable balance sheet.
Profitability Score
ModerateNKE maintains healthy but balanced margins.
Key Financial Metrics
Is NKE Expensive or Cheap?
P/E Ratio
NKE trades at 38.24 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, NKE's PEG of -3.11 indicates potential undervaluation.
Price to Book
The market values NIKE, Inc. at 6.85 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 24.77 times EBITDA. This signals the market has high growth expectations.
How Well Does NKE Make Money?
Net Profit Margin
For every $100 in sales, NIKE, Inc. keeps $5.43 as profit after all expenses.
Operating Margin
Core operations generate 6.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.43 in profit for every $100 of shareholder equity.
ROA
NIKE, Inc. generates $6.68 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
NIKE, Inc. generates limited operating cash flow of $3.06B, signaling weaker underlying cash strength.
Free Cash Flow
NIKE, Inc. produces free cash flow of $2.47B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.67 in free cash annually.
FCF Yield
NKE converts 2.56% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
38.24
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-3.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.85
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.07
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.80
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.18
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How NKE Stacks Against Its Sector Peers
| Metric | NKE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 38.24 | 25.25 | Worse (Expensive) |
| ROE | 18.43% | 1170.00% | Weak |
| Net Margin | 5.43% | 742.00% | Weak |
| Debt/Equity | 0.80 | 0.77 | Neutral |
| Current Ratio | 2.06 | 9.19 | Strong Liquidity |
| ROA | 6.68% | -6467.00% (disorted) | Weak |
NKE outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews NIKE, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
36.68%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
47.26%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
31.00%
Industry Style: Cyclical, Growth, Discretionary
High Growth