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 trading at $74.38, Nike Inc has experienced a daily increase of 2.31%, despite a three-month decline of -20.88%. A detailed analysis, supported by the GF Score, indicates that Nike Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, evaluating stocks based on five key aspects of valuation. These aspects have shown a strong correlation 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 92, suggesting a strong potential for market-leading returns.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 9/10
- GF Value rank: 4/10
- Momentum rank: 7/10
Understanding Nike Inc's Business
Nike Inc, with a market cap of $112.27 billion and annual sales of $51.36 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. The company operates globally through a mix of company-owned and franchised stores, alongside robust e-commerce platforms in over 40 countries. Founded in 1964 and headquartered in Beaverton, Oregon, Nike outsources nearly all its production to over 30 countries.
Financial Strength and Stability
Nike Inc's financial resilience is reflected in its robust balance sheet and prudent capital management. With an Altman Z-Score of 5.32, the company demonstrates a strong buffer against financial distress. Additionally, its strategic debt management is evidenced by a favorable Debt-to-Revenue ratio of 0.23, further solidifying its financial health.
Profitability and Operational Efficiency
Nike Inc stands out for its profitability, as indicated by its top-tier Profitability Rank. The company's financial health is further supported by a high Piotroski F-Score, which assesses aspects like profitability and funding efficiency. Moreover, its Predictability Rank of 5 stars highlights consistent operational performance, boosting investor confidence.
Growth Trajectory
Nike Inc's commitment to growth is evident from its high Growth Rank. The company has achieved a 3-Year Revenue Growth Rate of 11.6%, outperforming 62.16% of its peers in the Manufacturing - Apparel & Accessories industry. This growth is complemented by significant increases in EBITDA over recent years, underscoring its capacity for sustained expansion.
Conclusion
Considering Nike Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using 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.
