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Nike Stock Analysis

Nike Stock Analysis

Visit our Substack for more: https://www.overlookedalpha.com<br /><br />At a share price of 124, Nike stock has a market cap of 195.7 billion dollars.<br /><br />With 10.6 billion of cash, including short term investments, and 8.9 billion of long term debt the enterprise value is around 194 billion. <br /><br />That’s the rough figure you’d have to pay if you wanted to buy the company outright. Over the last 12 months, Nike has made just over 49 billion dollars in revenue and earned 5.6 billion dollars in net income. <br /><br />That means Nike stock is currently valued at 3.9 times revenue or 35 times earnings. And Nike stock also pays a dividend of just over 1%. <br /><br />Looking at a historical chart, Nike typically trades between 20-30 times earnings. So the current 35 times earnings multiple is not cheap, particularly as we move into a higher interest rate environment. <br /><br />But investors like to pay up for quality stocks in uncertain times. And Nike is certainly a quality company. Earnings have grown at a remarkably consistent rate over the past 15 years, just over 11% compounded. And free cash flow has grown around 9.2% as well.

Nike Stock - Quick Analysis #shorts

Nike Stock - Quick Analysis #shorts

More at our Substack: https://www.overlookedalpha.com <br />Nike also has one of the strongest brands in the world. A recent report by Interbrands put Nike’ brand value at around 50 billion dollars which is roughly one quarter of the current market cap. <br /><br />If we look at another historical chart, this blue line shows Nike stock at 25 times earnings, so you can see 25 times earnings has been a pretty good time to buy Nike over the last few years.. <br /><br />To put Nike stock into perspective, let’s say the company manages to grow earnings 10% per year for the next 10 years, and it manages to increase its dividend 10% a year as well. Assume you reinvest those dividends and then the stock trades at 30 times earnings at the end of those 10 years. That would take the share price up to around 310 in 10 years time for an investment return of around 9.5% per year. <br /><br />So that’s not bad. You can’t do too much wrong with Nike stock but it does look pretty fairly valued and I’d like to get it a bit cheaper. But these are my own opinions not financial advice and I do own some Nike shares. For more detailed investing ideas visit our website overlookedalpha.com<br /><br />#stocks #investing #overlookedalpha #financialtimes #nikestock

Should you buy Nike stock? (July 2023)

Should you buy Nike stock? (July 2023)

Nike stock analysis. <br />Join 8000 other investors: https://www.overlookedalpha.com<br /><br />Nike reported earnings last week and the stock dropped about 2%. Shares are now down 40% since hitting a peak in 2021. <br /><br />That means Nike is now valued at 168 billion dollars. It’s got 10.6 billion of cash and investments and 8.9 billion of long-term debt so the enterprise value is roughly 166 billion. <br /><br />In its latest report, Nike reported 51.2 billion in revenue for the latest fiscal year which was an increase of 10%. <br /><br />That’s decent growth but bottom-line earnings are suffering from inflation. Nike’s cost of sales increased by 14.6%, driven by an increase in raw materials and labor costs, so bottom line net income shrunk by 16% to 5.1 billion. <br /><br />That means Nike stock is currently valued at 3.2 times revenue and 33 times earnings. Looking at a historical chart, both ratios are near the bottom of their historical range though they’re not necessarily low enough to signal a buying opportunity. <br /><br />Looking ahead, Nike retains a dominant position in what is a highly competitive market. 65% of its revenue comes from footwear, of which there are no shortage of rivals, from established brands like Adidas to new upstarts like On Cloud. <br /><br />So the key to Nike’s future will be it’s ability to expand globally and on this front, there was good news. The latest report revealed that sales in China grew 16% in Q4 with a 22% increase in apparel sales. That compares to only a 5% increase in the North American market. <br /><br />This is a good sign that Nike will benefit from China’s post-pandemic recovery. In fact, earnings from the Chinese segment was up a whopping 70% on the quarter while all other areas were down.<br /><br />#stocks #investing #nikestock #stockstobuy

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