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Nike Inc
NKE : NYSE : Consumer Goods
$96.96 0.67 | 0.70%
Today's Range: 96.25 - 97.21
Avg. Daily Volume: 3,728,600
12/26/14 - 3:20 PM ET

Financial Analysis


NIKE INC's gross profit margin for the second quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. NIKE INC has strong liquidity. Currently, the Quick Ratio is 1.65 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.13% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)7380.06431.0
EBITDA ($mil)0.0866.0
EBIT ($mil)889.0738.0
Net Income ($mil)655.0537.0


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)4713.05287.0
Total Assets ($mil)19167.017820.0
Total Debt ($mil)1287.01388.0
Equity ($mil)11700.011344.0


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin45.0845.87
EBITDA Margin0.013.46
Operating Margin12.0511.48
Sales Turnover1.551.48
Return on Assets15.6115.99
Return on Equity25.5823.58
Debt Q2 FY14 Q2 FY13
Current Ratio2.843.53
Debt/Capital0.10.11
Interest Expense0.011.0
Interest Coverage0.067.09


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)864.0888.0
Div / share0.00.0
EPS0.740.59
Book value / share13.5412.77
Institutional Own % n/a n/a
Avg Daily Volume3975525.03415121.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 29.71 for the Textiles, Apparel & Luxury Goods industry and a premium compared to the S&P 500 average of 19.99. Conducting a second comparison, its price-to-book ratio of 7.17 indicates a significant premium versus the S&P 500 average of 2.76 and a premium versus the industry average of 6.66. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
NKE 28.89 Peers 29.71   NKE NA Peers 27.48

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

NKE is trading at a valuation on par with its peers.

 

Neutral. The P/CF ratio is the stock’s price divided by the sum of the company's cash flow from operations. It is useful for comparing companies with different capital requirements or financing structures.

Ratio not available.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
NKE 23.39 Peers 28.15   NKE 1.36 Peers 2.43

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

NKE is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

NKE trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NKE 7.17 Peers 6.66   NKE 14.28 Peers 82.38

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

NKE is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, NKE is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
NKE 2.82 Peers 2.75   NKE 13.21 Peers 13.54

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

NKE is trading at a valuation on par with its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

NKE is keeping pace with its peers on the basis of sales growth.

 

 

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