Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- NKE's revenue growth has slightly outpaced the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- NKE's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, NKE has a quick ratio of 1.77, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 514.94% to $535.00 million when compared to the same quarter last year. In addition, NIKE INC has also vastly surpassed the industry average cash flow growth rate of 184.95%.
- NIKE INC's earnings per share declined by 9.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NIKE INC increased its bottom line by earning $4.73 versus $4.40 in the prior year. This year, the market expects an improvement in earnings ($5.24 versus $4.73).
NIKE, Inc., together with its subsidiaries, engages in the design, development, marketing, and sale of footwear, apparel, equipment, and accessories for men, women, and children worldwide. Nike has a market cap of $35.85 billion and is part of the consumer goods sector and consumer non-durables industry. The company has a P/E ratio of 21.6, above the S&P 500 P/E ratio of 17.7. Shares are up 2.9% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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