Nike (NKE): Is It Worth Buying Now?

4:53 pm ET, 22 Mar 2018

Post earnings, Nike (NYSE: NKE) stock popped on good sales results.  

Mark Parker, the CEO, sees a significant reversal of a decline in North America.

In the past two years, the demand for Nike sneakers in North America had waned, which led to gross margin fall for a ninth straight quarter.  This indicated that Nike continued to compete on price with its rivals.

Nike's executive level turbulence is another worry for investors. Last week Nike witnessed its Brand President Trevor Edwards and VP Jayme Martin's resignation after a scandal related to the code of conduct. With the availability of very few details, it is not possible to tell precisely the course of events that caused this. 

Nike's CEO Mark Parker is committed to sticking to his position beyond 2020, which is a positive point for the investors.

Nike is also facing some business challenges stemming from increased selling and administrative expenses, and competitive threats. Nike's rivals such as Adidas and Under Armour (UAA) present a stiff competition.

According to Finstead Research, Nike’s average price target is $68 (roughly the same as the price after-hours today).

Nike’s valuation is fairly high with respect to its peers. It only lags behind CROX.


If you’re a trader, maybe you should wait until you're able to buy a dip again. 

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Nike, Inc. (NKE) Stock Guide

Updated at: 1:35 pm ET, 12 Jul 2020

Before we start: if you're looking for NKE stock price, you can quickly find it out by visiting Finny and typing "NKE quote". If you're looking for a quick scoop on NKE stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "NKE". You'll get all this info in one place. Or you can just type "NKE news" to get the latest stock news.

Looking to buy or sell Nike, Inc. (NKE)? Interested in getting the full scoop on NKE, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this NKE stock guide, we'll address key questions about NKE, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are NKE earnings?
2. When is NKE earnings date?
3. What is NKE dividend?
4. What is NKE dividend yield?
5. What is NKE stock forecast (i.e., prediction)?
6. NKE buy or sell? What is NKE Finny Score?
7. What are the reasons to buy NKE? Why should I buy NKE stock?
8. What are the reasons to sell NKE? Why should I sell NKE stock?
9. What are NKE key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are NKE earnings?

NKE trailing 12-month earnings per share (EPS) is $2.71.

2. When is NKE earnings date?

NKE earnings date is September 22, 2020.

3. What is NKE dividend?

NKE forward dividend is $0.98.

4. What is NKE dividend yield?

NKE forward dividend yield is 1.14%.

Analyst Predictions

5. What is NKE stock forecast (i.e., prediction)?

Based on NKE analyst price targets, NKE stock forecast is $94.14 (for a year from now). That means the average analyst price target for NKE stock is $94.14. The prediction is based on 37 analyst estimates.

The low price target for NKE is $64.50, while the high price target is $125.00.

NKE analyst rating is Buy.

Analysis

6. NKE buy or sell? What is NKE Finny Score?

#{finnyScore:33}Our quantitative analysis shows 4 reasons to buy and 8 reasons to sell NKE, resulting in Finny Score of 33.

7. What are the reasons to buy NKE? Why should I buy NKE stock?

Here are the reasons to buy NKE stock:

  • Nike can price its products at a premium due to brand image and innovation. It has been able to continue to raise prices and average price points, with customization offering further opportunities.
  • Nike's span footwear, apparel, and equipment across multiple geographies, channels and sports, mitigating its exposure to any particular category or market.
  • Nike is crucial to major athletic retailers around the globe. Although retailers and Nike call themselves partners, history suggests consumers switch retailers more readily than they will switch brands.
  • NIKE has been a leader in the U.S. footwear and athletic apparel industry. However, retailing is undergoing a sea change with consumers switching to digital shopping. While NIKE sees itself well positioned to gain from the rise in digital era, it remains focused on strengthening its leadership and driving growth through the next phase.
  • NIKE continues to seek opportunities for increasing global footprint, popularity and market share. Apart from acquiring new brands, the company has been focused on broadening its territory through the growth of e-commerce and NIKE Direct business. The enhancement of digital platform has led it to nearly double its revenue contributions from NIKE.com and its apps in just two years, getting over the $2 billion contribution mark.
  • To counter consumer shift toward online shopping, Nike unveiled a new company alignment – the Consumer Direct Offense. Driven by its triple-double strategy, this restructuring plan focuses on using digital methods for rapid innovation and product development, along with strengthening consumer relations by operating through core regions. As part of this plan, the company aims to drive growth by catering to consumers across 12 major cities including New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan.
  • Nike boasts a strong balance sheet, which offers it the financial flexibility to drive future growth. Further, the company has time and again testified its commitment to enhancing its shareholder value, aided by its strong financial position. Over the last 14 years, the company has distributed regular dividends and made share repurchases to improve shareholder returns.
  • NKE quarterly revenue growth was 5.10%, higher than the industry and sector average revenue growth (1.84% and 1.35%, respectively). See NKE revenue growth chart.
  • NKE forward dividend yield is 1.14%, higher than the industry (0.72%) and sector (0.58%) forward dividend yields. See NKE forward dividend chart.
  • NKE average analyst rating is Buy. See NKE analyst rating chart.
  • NKE cash to debt ratio is 0.48, higher than the average industry (0.22) and sector (0.14) cash to debt ratio. See NKE cash to debt chart.

8. What are the reasons to sell NKE? Why should I sell NKE stock?

Let's look at the reasons to sell NKE stock (i.e., the bear case):

  • The global athletic footwear and apparel market is competitive and strongly correlated to GDP growth. We expect industry growth will mature over a longer horizon.
  • Economic volatility can hurt top- and bottom-line results as more frugal consumers shy away from Nike's more expensive products.
  • Nike's "triple-double" strategy focused on product innovation (better balancing performance and style), supply chain (personalization and speed-to-market enhancements), and direct-to-consumer investments (personalized shopping and mobile app refinements) may take time for consumers to adopt.
  • While NIKE managed to deliver earnings and sales beat in second-quarter fiscal 2018, sales in its key North American market continues to suffer. The company posted a 5% decline in sales for North America in second-quarter fiscal 2018. Its soft sales in North America are attributed to the lackluster product assortments, increased promotions due to growth of e-commerce and intensified competition.
  • Driven by continued softness in North America, NIKE reiterated the previously stated soft outlook for fiscal 2018 and provided third-quarter view. Though the company expects continued strength in international business, it expects near-term results to be hurt by currency headwinds and a promotional retail environment across the United States. For fiscal 2018, reported revenues are anticipated to increase in the mid-single digits.
  • Nike faces intense competition in both domestic and international markets from local as well as established players. The athletic footwear and apparel industry is characterized by rapidly changing customer preferences and technology, which requires continuous innovation in order to stay ahead of trends and competitors. NIKE has been unbeatable in the U.S. footwear segment for long, thanks to the popularity of its namesake and Jordan brands.
  • The company’s footwear products are entirely manufactured outside the U.S. in developing countries such as China, Vietnam, Indonesia and Thailand. Accordingly, the company is exposed to political, social and economic risks associated with the operations in these countries.
  • NKE profitability is declining. The YoY profit margin change was -7.03 percentage points. See NKE profitability chart.
  • NKE forward P/E ratio is 31.59, which is high compared to its industry peers’ P/E ratios. See NKE forward P/E ratio chart.
  • NKE Price/Book ratio is 14.88, which is high compared to its industry peers’ P/B ratios. See NKE forward Price/Book ratio chart.
  • NKE Price/Sales ratio is 3.26, which is high compared to its industry peers’ P/S ratios. See NKE forward Price/Sales ratio chart.
  • NKE PEG ratio (P/E adjusted for growth) is 3.35, which is high compared to its industry peers’ PEG ratios. See NKE PEG chart.
  • NKE average analyst price target ($94.14) is below its current price ($97.99). See NKE price target chart.
  • NKE Enterprise Value/Revenue multiple is 3.49, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See NKE Enterprise Value/Revenue chart.
  • NKE Enterprise Value/EBITDA multiple is 24.60, which is high compared to its industry peers’ Enterprise Value/EBITDA ratios. See NKE Enterprise Value/EBITDA chart.

Key Stats

9. What are NKE key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for NKE:

Metrics NKE
Price $100.99
Average Price Target / Upside $94.14 / -6.78%
Average Analyst Rating Buy
Forward Dividend Yield 1.14%
Industry Footwear & Accessories
Sector Consumer Cyclical
Number of Employees 73,100
Market Cap $134.59B
Forward P/E Ratio 31.59
Price/Book Ratio 3.26
Revenue (TTM) $41.27B
YoY Quarterly Revenue Growth 5.10%
Profit Margin 10.46%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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