Nike NKE
What does Nike do?
Nike designs, develops and markets athletic footwear, apparel, equipment and accessories for women, men and children. Besides the core Nike brand, the offering includes the Jordan and Converse brands. The range spans performance products for running, basketball and soccer as well as lifestyle items for everyday wear. Products are manufactured mainly by independent contract manufacturers, primarily in Asia.
Revenue is generated through two channels: sales to wholesale partners and direct sales to consumers through the company's own stores, online shops and apps. License revenue is added to this. The company reports regionally for North America, Europe, the Middle East and Africa, Greater China and the Asia-Pacific region, among others. In competition, Nike is one of the world's largest sporting goods providers. Its position rests on high brand awareness, athlete partnerships, substantial marketing spending and a global distribution structure. Competitors include established sports brands such as Adidas and Puma as well as specialized, fast-growing providers.
Score profile
Rank vs. Consumer Cyclical (245 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Nike ranks above average in the group Consumer Cyclical (6.0/10). On growth, the company ranks below average in the group Consumer Cyclical (2.1/10). On valuation (higher = cheaper), the stock ranks below average in the group Consumer Cyclical (2.6/10). On financial strength, Nike ranks in the middle in the group Consumer Cyclical (5.7/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 25.0x | 14.5x | better than 12 % |
| Trailing P/E | 18.6x | 19.2x | better than 51 % |
| PEG ratio | 3.3x | 1.3x | better than 9 % |
| EV/EBITDA | 12.7x | 11.3x | better than 39 % |
| Price/sales | 1.3x | 1.0x | better than 42 % |
| Price/book | 3.8x | 2.5x | better than 37 % |
| Revenue growth | -4.3% | 3.5% | better than 17 % |
| Earnings growth | -2.1% | 0.0% | better than 25 % |
| Gross margin | 43.4% | 35.9% | better than 64 % |
| Operating margin | 7.9% | 9.0% | better than 44 % |
| Net margin | 6.7% | 5.5% | better than 61 % |
| Return on equity | 21.6% | 11.8% | better than 71 % |
| Debt/equity | 73.1% | 86.2% | better than 57 % |
| Current ratio | 2.1x | 1.4x | better than 78 % |
| Free cash flow yield | 3.1% | 4.7% | better than 35 % |
| Dividend yield | 4.2% | 2.2% | – |
| Payout ratio | 78.9% | 34.6% | – |
| Beta | 1.03 | 1.17 | – |
Valuation: what is Nike worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Nike a model range of 17.02 USD to 34.23 USD per share.
37 analysts, average rating “Hold”, average price target 36.42 USD (−5.8%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Brand strength and regular product innovation determine demand, pricing power and gross margin in the sports and lifestyle segment.
- The interplay between direct sales and wholesale partners shapes reach, profitability and control over pricing and brand presentation.
- Consumer spending in the major regions, particularly North America and China, significantly influences sales and earnings.
Risks
- Changing fashion trends and competitors with attractive new products can cost market share and force sell-offs through price discounts.
- Production is concentrated in a few countries in Asia, creating dependence on tariffs, trade policy and supply chains.
- Exchange rate fluctuations, raw material and freight costs, and excess inventory can significantly weigh on margin and earnings.
What to look for with Nike
Gross margin together with inventory development shows how well brand, pricing and inventory management are working, without discounts weighing on earnings.