Nike Inc (NKE, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its solid financial position. With its shares currently priced at $94.17, Nike Inc has experienced a slight daily decrease of 0.54%, amidst a three-month decline of 6.99%. However, a detailed analysis supported by the GF Score indicates that Nike Inc is poised for significant future growth.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. These aspects have been proven to correlate strongly with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield better returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Nike Inc boasts a GF Score of 95, reflecting its strong potential for market outperformance.
- Financial strength rank: 6/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 8/10
- Momentum rank: 5/10
Understanding Nike Inc's Business
Nike Inc, with a market cap of $142.13 billion and annual sales of $51.58 billion, is the world's largest athletic footwear and apparel brand. Key product categories include basketball, running, and football (soccer), with footwear accounting for about two-thirds of its sales. Nike operates globally through a mix of company-owned and franchised stores, alongside third-party retailers and extensive e-commerce platforms in over 40 countries. Founded in 1964 and headquartered in Beaverton, Oregon, Nike outsources nearly all its production to contract manufacturers across more than 30 countries.
Financial Strength and Profitability
Nike Inc's financial resilience is evidenced by its Altman Z-Score of 6.19, indicating a strong buffer against financial distress. The company's strategic debt management is reflected in its favorable Debt-to-Revenue ratio of 0.24. Additionally, Nike's Piotroski F-Score and a Predictability Rank of 5.0 stars further underscore its robust financial health and consistent operational performance.
Growth Trajectory
Nike Inc's commitment to growth is evident from its impressive Growth Rank of 10/10. The company has achieved a 3-Year Revenue Growth Rate of 11.6%, outperforming 65.7% of its peers in the Manufacturing - Apparel & Accessories industry. Furthermore, Nike's EBITDA has seen significant increases, with a three-year growth rate of 17.5% and a five-year rate of 9.3%, highlighting its sustained ability to expand and generate increased earnings.
Conclusion
Considering Nike Inc's robust financial strength, high profitability, and compelling growth metrics, the GF Score distinctly highlights the company's superior position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through the GF Score Screen.
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.
