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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Nike, Inc. (XNYS:NKE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NKE
Name:
NIKE, INC. (XNYS:NKE)
Sector:
927.00M
Industry:
Footwear & Accessories
CEO:
Mr. John Donahoe
Total Employees:
79,100
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 193.38% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NIKE, INC.(NKE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FOOTWEAR & ACCESSORIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
105.74
One Month Price Target:
$106.35
Six Month Price Target :
$109.41
Likely Price in One Year's Time:
Ticker:
$113.07
Likely Trading Range Today Under (Normal Volatility)
$105.37
Price Upper limit ($) :
$106.19
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$100.87
This week:
$94.86
This month :
$83.98
Other Primary facts
Market Cap:
165.01B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.57B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.53%
-11.67%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$128.32
$117.97
$83.16
$93.51
Medium risk (<10%) entry points
Buy Call
Sell Call
$114.60
Buy Put:
Sell Put:
$112.39
$96.86
$99.09
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NKE
Sharpe Ratio:
1.27%
Comparison:
NKE, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -18.80% lower than the industry
& is -44.11% lower than the market/S&P 500 average
Average Returns/Yield of
NKE
Daily returns:
0.04%
Weekly returns:
0.19%
Monthly returns:
0.75%
Yearly returns:
13.15%
Comparison of returns:
Average annual returns/yield (last 3 years) is -31.33% below industry average
Classification:
NKE, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.72
Statistical test of Returns:
NKE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.26%
Weekly Volatility:
5.05%
Monthly Volatility:
10.10%
Yearly Volatility:
35.00%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.64%
Volatility in last five trading days has been -71.84% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.60%
Weekly VaR:
-10.29%
Monthly VaR:
-20.58%
How Much Can the price of
NKE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.29%
This translates to price declining to:
$86.95
This translates to price declining to:
$30.36
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
NKE is a 45.25% riskier investment compared to the market/S&P 500 & is 24.43% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.40% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NKE
Beta in relation to market/S&P 500--1.03
Expected beta in 1 year's time:
0.933
Expected beta in 3 year's time:
1.319
Unlevered (debt free) Beta:
0.594
Beta in relation to Nasdaq (XNAS):
0.837
Beta in relation to all global stocks::
0.71
Beta Comparison & Analysis
Beta of competitors/peers::
0.967
Beta is 6.76% higher than peers
Average Industry Beta:
1.075
Beta is -3.96% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
32.47%
Sustainable growth rate is 30.39% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.012
Alpha is -145.06% below industry average alpha yield
Alpha is -76% below the market average
Analysis of Cost of Capital of
NKE
Equity cost of capital:
0.102
Equity cost of capital is -2.77% below industry mean WACC
Unlevered (without debt) cost of capital:
5.89%
Before-tax cost of debt:
-0.41%
After-tax cost of debt:
-0.33%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-0.33%
WACC is -21.38% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$29.85
Revenue growth rate per share of (3Y):
11.56
Annual revenue growth rate is -19.67% below industry average
EPS:
$3.75
Expected Annual growth rate of EPS (3Y):
14.02%
Expected future EPS growth rate is -20.14% lower than the Footwear & Accessories industry
Free cash flow (FCF) per share:
$3.43
Balance sheet equity growth per share: 36.03%
Equity growth rate per share is 222.93% higher than the industry
Debt per share
$7.85
EBITDA per share
$5.00
Valuation Analysis Today of
NKE
P/E Ratio:
28.16
P/E Ratio of Competitors/Peers:
22.54
P/E ratio is 24.94% higher than main peers & is 31.25% higher than the industry
Stock price/value with industry average P/E ratio: $80.46
NKE is 31.42% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $30.01
Present value of the expected future dividends only: $15.41
P/S (Price to Sales ratio):
3.54
Price to sales ratio is 35.33% above the industry mean
P/B (Price to book value ratio):
11.56
Price to free cash flow: 30.84
Price to free cash flow ratio is -4.42% lower than the industry
Net income growth rate (3Y):
205.84%
Net income growth rate is 20.19% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 7.11%
Dividend yeild: 1.13%
Previous Dividend: $0.31
Previous adjusted dividend: $0.31
Previous Dividend: $1.19
Expected next dividend best case: $0.33
Expected next dividend worst case: $0.28
Average dividend payment (long-term): $0.27
Average dividend increase/decrease (growth rate) % per period: 2.32%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 09/05/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 06/06/2022
-
Dividend History:
2022-06-03--$0.31
2021-12-03--$0.31
2021-05-28--$0.28
2022-03-04--$0.31
2021-08-27--$0.28
2021-02-26--$0.28
Dividend growth rate is -97.00% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
85.85%
Net debt to equity ratio:
14.43%
Debt to assets ratio:
32.47%
Net debt to assets ratio:
5.46%
Debt-to-asset ratio is -29.24% below industry average
Ability to repay debt:
Interest coverage ratio:
-147.98
Interest coverage ratio is -211.90% less than industry average
Looking forward:
Debt growth rate:
-73.88%
Annual debt growth is -351% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.722
Statistical significance of correlation:
NKE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.632
Stock price is 14.23% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.632
Correlation of price movement with Nasdaq (^IXIC):
-0.01
Covariance of price movement with the market:
-0.013
Kurtosis
8.58
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.525
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
NKE
Gross Profit Margin Ratio:
185%
Operating Profit Margin Ratio:
15.21%
Operating profit margin is 25.63% higher than the industry
Net Profit Margin Ratio:
185%
Effective Tax Rate:
14.23%
Effective tax rate is -20.84% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
42.64%
Return on equity (ROE) is 43.52% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.13%
Return on assets (ROA) is 16.74% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
3.19
Current ratio is 22.64% above industry average
Cash Conversion Cycle (days):
12.2
Cash conversion cycle is -84.30% below industry average
The remaining useful life of property plant & equipment is: 12.8 years
Stock based compensation to net income ratio:
2.22%
In-depth Efficiency Analysis
Revenue generated per employee:
591.9K
Each employee generates -29% less revenue than industry average revenue per employee
EBITDA generated per employee:
99.2K
Each employee generates -20% less EBITDA than industry average revenue per employee
Profit generated per employee:
77.3K
Each employee generates -26% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
11.7K
Each employee generates -198% less free cash flow than industry average revenue per employee
Assets/Capital per employee
145.7K
Each employee generates -198% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
NKE
TOYOTA MOTOR CORPORATION (XNYS:TM)
THE WALT DISNEY COMPANY (XNYS:DIS)
MCDONALD'S CORPORATION (XNYS:MCD)
Alibaba Group Holding Limited (XNYS:BABA)
FORD MOTOR COMPANY (XNYS:F)
GENERAL MOTORS COMPANY (XNYS:GM)
THE TJX COMPANIES, INC. (XNYS:TJX)
THE HOME DEPOT, INC. (XNYS:HD)
Stellantis NV (XNYS:STLA)
Current Analyst Ratings
Strong buy�29%
Buy�50%
Hold�71%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
2/28/22
Revenue:
46.82B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
25.19B
21.63B
-
10.73B
14.51B
3.79B
-
14.51B
-
- 53000.00K
765.00M
7.84B
7.12B
6.12B
7.13B
1.02B
6.12B
Statement of Cash Flow
Date:
Period:
168.00M
Differed Income Tax :
- 145000.00K
Stock Based Compensation :
136.00M
Change in Working Capital :
- 965000.00K
Accounts Receivables:
36.00M
Other Working Capital:
18.12B
Other Non-Cash Items:
43.00M
Net Cash Provided by Operating Activities:
1.11B
Investments in PP&E:
- 184000.00K
Net Acquisitions:
-
Purchases of Investments:
- 2550000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
8/31/21
2022
Q1
10.72B
2.98B
13.70B
4.34B
6.70B
1.66B
26.39B
7.95B
242.00M
267.00M
-
3.07B
-
11.53B
-
37.92B
2.14B
477.00M
866.00M
-
5.66B
8.27B
12.31B
-
15.31B
-
23.57B
3.00M
3.89B
- 67000.0K
10.52B
August 31, 2021 at 6:00:00 AM
39.70B
14.34B
37.92B
-
12.79B
2.1B
3.13B
102.00M
501.00M
-
-
- 752000.00K
- 435000.00K
444.00M
- 743000.00K
- 38000.00K
831.00M
10.72B
9.89B
1.11B
- 184000.00K
927.00M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
NKE
2023
2024
2025
2026
2027
$124.86
$133.52
$142.78
$152.68
$163.27