Nike Inc (NKE, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $92.22, Nike Inc has witnessed a daily gain of 0.24%, marked against a three-month change of -12%. A thorough analysis, underlined by the GF Score, suggests that Nike Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 10/10
- Momentum rank: 5/10
While Nike Inc's financial strength and momentum ranks are solid, it's the profitability and growth ranks that truly stand out, each scoring a perfect 10. This combination of high scores across the board has led GuruFocus to assign Nike Inc a GF Score of 96 out of 100, signaling the highest outperformance potential.
Understanding Nike Inc's Business
Nike Inc, with a market cap of $139.19 billion and sales of $51.58 billion, is the largest athletic footwear and apparel brand in the world. Operating with a margin of 11.61%, the company's key categories include basketball, running, and football (soccer), with footwear generating about two-thirds of its sales. Its brands include Nike, Jordan, and Converse (casual footwear). Nike sells products worldwide through company-owned stores, franchised stores, and third-party retailers. The firm also operates e-commerce platforms in more than 40 countries. Nearly all its production is outsourced to contract manufacturers in more than 30 countries. Founded in 1964 and based in Beaverton, Oregon, Nike's history of innovation and global presence has cemented its industry leadership.
Financial Strength Breakdown
According to the Financial Strength rating, Nike Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 6.07, Nike Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.24, Nike Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Nike Inc's impressive standing among its peers in generating profit. The Piotroski F-Score confirms Nike Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. Nike Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Nike Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 11.6%, which outperforms better than 71.61% of companies in the Manufacturing - Apparel & Accessories industry. Moreover, Nike Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 17.5, and the rate over the past five years is 9.3. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering Nike Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen. As Nike Inc continues to innovate and expand its global footprint, it remains a compelling choice for value investors seeking growth and stability in their portfolios.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
