NEW YORK (TheStreet) -- Nike (NKE) shares are falling 1.05% to $105.10 in early market trading on Thursday ahead of the release of the shoe company's fourth quarter earnings results after the closing bell today.
The Beaverton, OR-based company is expected to report fourth quarter earnings of 84 cents per share on revenue of $7.7 billion.
In the year ago period the company reported earnings of 78 cents per share on revenue of $7.4 billion.
"I don't like that Nike has run up so much," said TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio. "Otherwise the quarter should be good."
TheStreet has further coverage of Nike ahead of its earnings release here.
TheStreet Ratings team rates NIKE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NIKE INC (NKE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 39.08% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NKE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- NIKE INC has improved earnings per share by 18.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NIKE INC increased its bottom line by earning $2.98 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.55 versus $2.98).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 16.0% when compared to the same quarter one year prior, going from $682.00 million to $791.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 7.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NKE's debt-to-equity ratio is very low at 0.10 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 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: NKE Ratings Report