📈 Stock Analysis: NKE
Nike Inc
Sector: Consumer Discretionary | Industry: Textiles Apparel & Luxury Goods
Market Cap: $ 96 Bn
Price: $ 68
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D Composite Grade
Composite Score: 43.00 (Percentile: 61.00%)
12 Month Price
Stock Grades
A+ MOAT
This company has an exceptional economic moat, meaning it possesses a strong and sustainable competitive advantage. It benefits from high barriers to entry, strong brand recognition, and significant pricing power.
E FUNDAMENTALS
| Metric | Value | Check |
|---|---|---|
| Net Profit Margin | 7% | ❌ |
| EPS Growth (3Y | 5Y) | 17% | 6% | ✅ |
| Revenue Growth (3Y | 5Y) | 0% | 4% | ❌ |
| Forecasted EPS Growth (5Y) | 8% | ✅ |
| Forecasted Revenue Growth (1Y) | 3% |
A FINANCIAL
| Metric | Value | Check |
|---|---|---|
| ROE | 21% | ✅ |
| ROIC | 11% | ✅ |
| Debt/Equity | 0.59 | ✅ |
| Capital Allocation | Strong | ✅ |
D VALUATION
| Metric | Value | Check |
|---|---|---|
| Fair Value | 104 | ✅ |
| P/Earnings (TTM) | 33 | ❌ |
| P/Earnings Forecasted | 39 | ❌ |
| P/CashFlow | 24 | ❌ |
| PEG TTM | 19.66 | ❌ |
| Stock Buyback (5Y, 10Y) | 4%, 14% | ❌ |
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INVESTMENT COMMENTARY
Nike Inc. (NKE) remains a globally dominant brand with an exceptional economic moat, driven by its iconic branding, pricing power, global reach, and consumer loyalty. Its strong recognition and high barriers to entry make it a cornerstone name in the athletic apparel and footwear industry.
However, while its moat and financial foundation remain strong—evidenced by a solid Return on Equity (35%) and responsible capital allocation—Nike's recent fundamental and valuation metrics suggest caution. Its growth trends have slowed, with only modest EPS and revenue growth over the past five years (EPS: 2% 3Y | 8% 5Y; Revenue: 5% 3Y | 6% 5Y), and forward-looking estimates reflect muted expectations (EPS growth forecast: 3%, revenue growth forecast: 0%).
On the valuation front, Nike appears overvalued relative to its growth prospects, with a high forward P/E of 35 and a PEG ratio of 0, signaling weak earnings momentum relative to its price. Although its fair value estimate ($112) suggests upside from its current price of $73, that may be overly optimistic if growth remains sluggish.
Overall, Nike continues to be a premium brand with a long runway, but current headwinds in fundamentals and stretched valuation metrics suggest the stock may not be an ideal buy at present. Investors may consider waiting for signs of growth reacceleration or a more favorable price entry before building or expanding a position.