-1.12 | -1.74%
NIKE INC's gross profit margin for the third quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. NIKE INC is extremely liquid. Currently, the Quick Ratio is 2.08 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.
At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.82% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.
| Income Statement | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Net Sales ($mil) | 6187.0 | 5656.0 |
| EBITDA ($mil) | 987.0 | 875.0 |
| EBIT ($mil) | 873.0 | 777.0 |
| Net Income ($mil) | 866.0 | 560.0 |
| Balance Sheet | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Cash & Equiv. ($mil) | 4042.0 | 3197.0 |
| Total Assets ($mil) | 15615.0 | 14794.0 |
| Total Debt ($mil) | 321.0 | 369.0 |
| Equity ($mil) | 10667.0 | 10176.0 |
| Profitability | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Gross Profit Margin | 46.02 | 45.6 |
| EBITDA Margin | 15.95 | 15.47 |
| Operating Margin | 14.11 | 13.74 |
| Sales Turnover | 1.61 | 1.55 |
| Return on Assets | 15.15 | 15.33 |
| Return on Equity | 21.72 | 22.64 |
| Debt | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Current Ratio | 3.37 | 3.21 |
| Debt/Capital | 0.03 | 0.04 |
| Interest Expense | 4.0 | 7.0 |
| Interest Coverage | 218.25 | 111.0 |
| Share Data | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Shares outstanding (mil) | 893.62 | 916.74 |
| Div / share | 0.42 | 0.18 |
| EPS | 0.73 | 0.61 |
| Book value / share | 11.94 | 11.1 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 3840019.0 | 2944324.0 |
BUY. The current P/E ratio indicates a discount compared to an average of 26.03 for the Textiles, Apparel & Luxury Goods industry and a premium compared to the S&P 500 average of 19.08. For additional comparison, its price-to-book ratio of 5.40 indicates a significant premium versus the S&P 500 average of 2.44 and a discount versus the industry average of 5.58. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. Upon assessment of these and other key valuation criteria, NIKE INC proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NKE 25.57 | Peers 26.03 | NKE 21.99 | Peers 21.93 | |||||||||||||||||||||
|
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. |
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. NKE is trading at a valuation on par to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| NKE 21.13 | Peers 33.22 | NKE NM | Peers 1.85 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. NKE is trading at a significant discount to its peers. |
Neutral. 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's negative PEG ratio makes this valuation measure meaningless. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| NKE 5.40 | Peers 5.58 | NKE 3.49 | Peers 72.04 | |||||||||||||||||||||
|
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. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| NKE 2.30 | Peers 2.73 | NKE 9.73 | Peers 39.24 | |||||||||||||||||||||
|
Discount. 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 discount to its industry on this measurement. |
Lower. A sales growth rate that trails the industry implies that a company is losing market share. NKE significantly trails its peers on the basis of sales growth |
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