Rubber & Plastics Footwear
NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells men's, women's, and kids athletic footwear, apparel, equipment, and accessories worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. In addition, it sells a line of performance equipment and accessories comprising bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. The company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel. Additionally, it licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. The company sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. The company was formerly known as Blue Ribbon Sports, Inc. and changed its name to NIKE, Inc. in 1971. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.
Sector
Discounted Cash Flow Valuation of Nike, Inc.
Growth
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Discount
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g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $6.195B | $6.691B | $7.203B | $7.732B | $8.273B | $8.824B | $9.383B | $9.946B | $10.51B | $11.07B | $11.62B | $116.2B |
DCF | $5.818B | $5.447B | $5.084B | $4.73B | $4.387B | $4.057B | $3.739B | $3.436B | $3.147B | $2.873B | $28.73B | |
Value | $71.45B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 05-2015 | 05-2016 | 05-2017 | 05-2018 | 05-2019 | 05-2020 | 05-2021 | 05-2022 | 05-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 11% | 12% | 12% | 5.3% | 10% | 6.8% | 13% | 13% | 9.9% | 10% |
ROA | 19% | 22% | 21% | 19% | 20% | 9.2% | 18% | 16% | 17% | 17% |
ROE | 26% | 31% | 34% | 20% | 45% | 32% | 45% | 40% | 36% | 37% |
The average Net Margin over the past 5 years is +9.68%.
The trend of Net Margin over the past 5 years is +1.06%.
The average ROA over the past 5 years is +16.48%.
The trend of ROA over the past 5 years is -0.41%.
The average ROE over the past 5 years is +36.07%.
The trend of ROE over the past 5 years is +2.31%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 05-2015 | 05-2016 | 05-2017 | 05-2018 | 05-2019 | 05-2020 | 05-2021 | 05-2022 | 05-2023 | TTM |
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Debt FCF | - | 1.07 | 1.50 | 0.97 | 0.73 | 6.90 | 1.58 | 2.24 | 1.83 | 1.44 |
Debt Equity | 0.10 | 0.17 | 0.31 | 0.39 | 0.38 | 1.20 | 0.74 | 0.65 | 0.64 | 0.63 |
MIN | ||||||||||
Graham Stability | - | - | - | 51% | 100% | 75% | 100% | 100% | 100% | 51% |
The Debt/FCF trailing twelve month is 1.44.
The trend of Debt/FCF over the past 5 years is 0.10.
Graham’s Stability measure stands at 0.51.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 05-2016 | 05-2018 | 05-2020 | 05-2022 | Trend |
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Revenue | 6.8% | 7.1% | 11% | 9.6% | 0.58% |
Net Income | 4.4% | 21% | 26% | -16% | 1.7% |
Stockholders Equity | 1.9% | 7.4% | 20% | -8.4% | 3.5% |
FCF | 14% | 4.4% | 52% | 10% | 10% |
The Revenue CAGR over the past 5 years is +7.07%.
The trend of Revenue growth rate over the past 5 years is +0.58%.
The Earnings CAGR over the past 5 years is +21.27%.
The trend of Earnings growth rate over the past 5 years is +1.68%.
The Equity CAGR over the past 5 years is +7.37%.
The trend of Equity growth rate over the past 5 years is +3.5%.
The FCF CAGR over the past 5 years is +4.41%.
The trend of FCF growth rate over the past 5 years is +10.07%.