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Nike Inc (NKE)
:NKE
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Nike
(NYSE:NKE)74Outperform
Positive Factors
Innovation and Product Launches
The launch of the Vomero 18 reinforces NKE's commitment to innovation and adds a fresh, differentiated look to the market.
Market Position and Growth
Nike's brand ubiquity and global distribution advantage should allow it to outgrow the market.
Negative Factors
Market Challenges
Macro-slowdown has inevitably dragged Nike's key markets including US and EMEA, while China recovery has missed expectations.
Nike (NKE) vs. S&P 500 (SPY)
Market Cap
$115.98B
Dividend Yield1.93%
Average Volume (3M)13.60M
Price to Earnings (P/E)24.2
Beta (1Y)0.71
Revenue Growth-4.77%
EPS Growth-5.99%
CountryUS
Employees79,400
SectorConsumer Cyclical
Sector Strength53
IndustryApparel & Luxury
Share Statistics
EPS (TTM)3.24
Shares Outstanding1,181,239,100
10 Day Avg. Volume13,823,918
30 Day Avg. Volume13,601,956
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.37
Price to Cash Flow (P/CF)27.60
P/FCF Ratio31.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$86.52Price Target Upside11.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering28
Nike Business Overview & Revenue Model
Company DescriptionNIKE, Inc. is a maker of athletic footwear, apparel, accessories and equipment. It also sells athletic lifestyle sneakers, apparel and accessories under the Converse line. The company was founded by William Jay Bowerman and Philip H. Knight in 1964 and is headquartered in Beaverton, OR.
How the Company Makes MoneyNike makes money primarily through the sale of its athletic footwear, apparel, and equipment. The company's revenue model is centered around a combination of direct-to-consumer sales via its online platforms and physical retail stores, as well as wholesale distribution to third-party retailers. Key revenue streams include sales from its flagship Nike brand, as well as subsidiary brands like Converse and Jordan. Additionally, Nike benefits from strategic partnerships and endorsements with high-profile athletes and sports teams, which enhance its brand visibility and drive consumer demand. The company's earnings are further supported by its investments in marketing and product innovation, which help maintain its competitive edge in the global sportswear market.
Nike Financial Statement Overview
Summary
Nike's financial performance is solid, with strong profitability and efficient cost management reflected in high income statement scores. Although revenue has declined, healthy margins and cash flow management show resilience.Income Statement
Nike's income statement shows robust performance with a gross profit margin of 44.6% TTM and net profit margin of 10% TTM. Despite a slight reduction in revenue from the previous year, margins remain strong, indicating efficient cost management. The EBIT margin of 11.3% TTM and EBITDA margin of 12.1% TTM further confirm this efficiency.85
Very Positive
Balance Sheet
Nike maintains a solid balance sheet with a debt-to-equity ratio of 0.86 TTM, reflecting a balanced approach to leverage. The equity ratio stands at 36.9% TTM, indicating a healthy level of equity financing. The return on equity at 34.8% TTM is impressive, showcasing strong profitability relative to shareholder investments.75
Positive
Cash Flow
Cash flow analysis reveals positive trends, with an operating cash flow to net income ratio of 1.04 TTM, suggesting that net income is well-supported by cash flows. Free cash flow growth is robust, although the free cash flow to net income ratio of 0.94 TTM suggests a slight drop from past performance.80
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 48.98B | 51.36B | 51.22B | 46.71B | 44.54B | 37.40B | Gross Profit |
| 21.84B | 22.89B | 22.29B | 21.48B | 19.96B | 16.24B | EBIT |
| 5.51B | 6.69B | 5.06B | 5.83B | 6.14B | 2.00B | EBITDA |
| 5.91B | 7.16B | 5.92B | 6.67B | 6.94B | 3.12B | Net Income Common Stockholders |
| 4.89B | 5.70B | 5.07B | 6.05B | 5.73B | 2.54B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 11.58B | 11.58B | 10.68B | 13.00B | 13.48B | 8.79B | Total Assets |
| 38.11B | 38.11B | 37.53B | 40.32B | 37.74B | 31.34B | Total Debt |
| 11.95B | 11.95B | 12.14B | 12.63B | 12.81B | 13.02B | Net Debt |
| 2.09B | 2.09B | 4.70B | 4.05B | 2.92B | 4.67B | Total Liabilities |
| 23.68B | 23.68B | 23.53B | 25.04B | 24.97B | 23.29B | Stockholders Equity |
| 14.43B | 14.43B | 14.00B | 15.28B | 12.77B | 8.05B |
| Cash Flow | Free Cash Flow | ||||
| 5.52B | 6.62B | 4.87B | 4.43B | 5.96B | 1.40B | Operating Cash Flow |
| 6.12B | 7.43B | 5.84B | 5.19B | 6.66B | 2.48B | Investing Cash Flow |
| -221.00M | 894.00M | 564.00M | -1.52B | -3.80B | -1.03B | Financing Cash Flow |
| -5.81B | -5.89B | -7.45B | -4.84B | -1.46B | 2.49B |
Nike Technical Analysis
Neutral
77.32
Price Trends
74.65
Positive
76.19
Positive
79.17
Negative
Market Momentum
1.39
Negative
53.38
Neutral
39.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NKE, the sentiment is Neutral. The current price of 77.32 is above the 20-day moving average (MA) of 75.60, above the 50-day MA of 74.65, and below the 200-day MA of 79.17, indicating a neutral trend. The MACD of 1.39 indicates Negative momentum. The RSI at 53.38 is Neutral, neither overbought nor oversold. The STOCH value of 39.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NKE.
Nike Risk Analysis
Nike disclosed 40 risk factors in its most recent earnings report. Nike reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nike Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
86 Outperform | $43.82B | 24.94 | 39.92% | ― | 10.84% | 76.07% | |
74 Outperform | $115.98B | 24.22 | 34.81% | 1.93% | -4.77% | -5.99% | |
73 Outperform | $9.21B | 14.09 | 13.52% | ― | 12.11% | 19.16% | |
71 Outperform | $4.81B | 22.75 | 12.54% | 1.43% | -3.35% | -6.09% | |
67 Neutral | $46.10B | 97.66 | 10.13% | 0.18% | 4.84% | ― | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
52 Neutral | $2.83B | ― | -6.76% | ― | -7.47% | -131.70% |
* Consumer Cyclical Sector Average
Performance Comparison
NKE
Nike
77.32
-19.19
-19.88%
COLM
Columbia Sportswear
83.24
4.56
5.80%
LULU
Lululemon Athletica
345.29
-100.77
-22.59%
SKX
Skechers USA
57.76
-2.88
-4.75%
UA
Under Armour
6.18
-2.09
-25.27%
ADDYY
Adidas
125.12
24.70
24.60%
Nike Earnings Call Summary
Earnings Call Date: Dec 19, 2024 | % Change Since: 0.80% | Next Earnings Date: Mar 20, 2025
Earnings Call Sentiment Neutral
The earnings call highlights Nike's strategic focus on reinvesting in product innovation and brand marketing to drive long-term growth. However, there are significant short-term challenges, including revenue declines, gross margin pressures, and difficulties in key markets like Greater China, which the company is addressing with urgency.Highlights
Strong Brand and Athlete Partnership
The company has reaffirmed long-term partnerships with major sports leagues, including the NFL, NBA, and WNBA, and has signed agreements with key entities like Brazil Football Confederation and FC Barcelona.
Growth in Sport Performance
Sport performance fields of play grew year-over-year, with significant growth in men's and women's training and basketball.
Strategic Product and Brand Investments
Nike is investing in product innovation and brand marketing, focusing on major sports like running, basketball, training, and football to drive growth.
Lowlights
Revenue Decline
Overall revenues were down 8% on a reported basis and 9% on a currency-neutral basis, with specific declines in NIKE Direct (down 14%), NIKE Digital (down 21%), and wholesale (down 4%).
Gross Margin Erosion
Gross margins decreased by 100 basis points to 43.6% due to higher markdowns, wholesale discounts, and channel mix headwinds.
Challenges in Greater China
Revenue in Greater China declined by 11%, with significant retail traffic declines and increased markdown activity affecting gross margins.
High Inventory Levels
Inventory levels remain higher than desired, particularly in North America and Greater China, necessitating aggressive actions to reduce aged inventory.
Company Guidance
During Nike's Q2 2025 earnings call, the company provided guidance that reflects a strategic pivot towards revitalizing its brand through sport-centered initiatives and marketplace adjustments. Revenues were down 8% on a reported basis and 9% currency-neutral, largely due to franchise management actions. Nike Direct sales dropped 14%, with digital sales declining 21%. Gross margins fell by 100 basis points to 43.6% due to heightened markdowns and discounts. The company plans to shift Nike Digital to a full-price model and reduce promotions, which will initially pressure earnings but aim to stabilize long-term growth. Strategic investments will focus on brand marketing, especially around global sports moments, and inventory will be aggressively managed to create capacity for new product lines, with a notable decline in classic footwear franchises. Nike expects Q3 revenues to decline by low double digits, with a gross margin decrease of 300 to 350 basis points, as they implement these measures.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.