NIKE, Inc. (NKE) Stock Analysis
NIKE, Inc. (NKE) Stock Analysis
Analysis from 10-Q filed 2025-12-30. Data as of Q1 2026.
Overall Grade: F (Concerning)
NIKE, Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 10.0% | Near cost of capital |
| FCF Margin | 2.3% | Cash flow pressure |
| Debt/Equity | 0.6x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore NIKE, Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: NIKE, Inc. earns 10.0% ROIC, Top 50% in Industrials
NIKE, Inc.'s trailing-twelve-month ROIC of 10.0% ranks Top 50% in Industrials companies (sector median: 7.4%), driven by NOPAT margin of 4.7% combined with asset turnover of 1.2x. Source: 10-Q filed 2025-12-30. Gross margin of 40.8% with operating margin at 6.0% reflects strong pricing power.
| Metric | NKE | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 10.0% | Adequate | Above sector median of 7.4% |
| Return on Equity (ROE) | 16.4% | Good | Efficient use of shareholder equity |
| Gross Margin | 40.8% | Good | Strong pricing power |
| Operating Margin | 6.0% | Adequate | Moderate operational efficiency |
Cash Flow: NIKE, Inc. generates $1.0B FCF at 2.3% margin, positive NaN/8 quarters
NIKE, Inc. generated $1.0B in free cash flow (TTM), a 2.3% FCF margin, a margin that ranks Bottom 50% in Industrials. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-30.
| Metric | NKE | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 2.3% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $1.0B | Good | Positive cash generation |
| OCF/Net Income | 0.8x | Adequate | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: NIKE, Inc. at 0.6x leverage
NIKE, Inc.'s debt-to-equity ratio of 0.6x reflects moderate leverage. Total debt of $8.0B offset by $6.7B in cash. Source: 10-Q filed 2025-12-30.
| Metric | NKE | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.6x | Good | Moderate leverage |
| Net Cash Position | $-1.4B | Warning | Net debt position |
Valuation: NIKE, Inc. trades at 40.6x earnings
NIKE, Inc. trades at a P/E of 40.6x. Free cash flow yield of 1.1% reflects market expectations for growth.
| Metric | NKE | Rating | Context |
|---|---|---|---|
| P/E Ratio | 40.6x | Adequate | Premium valuation |
| EV/Sales | 2.0x | Excellent | Attractive revenue multiple |
| FCF Yield | 1.1% | Warning | Lower cash yield |
| Dividend Yield | 2.6% | Adequate | Growth focus over income |
Capital Allocation: NIKE, Inc. returns 3.0% shareholder yield
NIKE, Inc.'s total shareholder yield is 3.0% (dividends 2.6% + buybacks 0.4%). Source: 10-Q filed 2025-12-30.
| Metric | NKE | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 3.0% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.4% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $2.7B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 10.0% | Top 50% | 1.4x above |
| Free Cash Flow Margin | 2.3% | Bottom 50% | 0.5x below |
| Gross Margin | 40.8% | Top 50% | 1.2x above |
| Operating Margin | 6.0% | Bottom 50% | 0.8x below |
| Return on Equity (ROE) | 16.4% | Top 50% | 1.9x above |
| P/E Ratio | 40.6x | N/A | - |
Financial Scorecard
| Metric | NKE | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 10.0% | Adequate | Top 50% of sector (median: 7.4%) |
| Free Cash Flow Margin | 2.3% | Warning | Bottom 50% of sector (median: 4.7%) |
| Gross Margin | 40.8% | Good | Top 50% of sector (median: 32.9%) |
| Debt to Equity Ratio | 57.0% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 40.6x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 1.1% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is NIKE, Inc.'s Return on Invested Capital (ROIC)?
NIKE, Inc. (NKE) has a trailing twelve-month Return on Invested Capital (ROIC) of 10.0%. This compares above the sector median of 7.4%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is NIKE, Inc.'s Free Cash Flow Margin?
NIKE, Inc. (NKE) has a free cash flow margin of 2.3%, generating $1.0 billion in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is NIKE, Inc. stock overvalued or undervalued?
NIKE, Inc. (NKE) trades at a P/E ratio of 40.6x, which is above the sector median of N/A. The EV/Sales multiple is 2.0x. Free cash flow yield is 1.1%, reflecting growth expectations priced into the stock.
Q: Does NIKE, Inc. pay a dividend?
NIKE, Inc. (NKE) currently pays a dividend yield of 2.6%. Including share buybacks, the total shareholder yield is 3.0%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: How much debt does NIKE, Inc. have?
NIKE, Inc. (NKE) has a debt-to-equity ratio of 0.6x with total debt of $8.0 billion. Net debt position is $1.4 billion.
Q: What is NIKE, Inc.'s revenue and earnings growth?
NIKE, Inc. (NKE) declined revenue by 2.7% year-over-year. Earnings per share decreased by 49.8% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is NIKE, Inc. buying back stock?
NIKE, Inc. (NKE) repurchased $345.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.4%.
Q: How does NIKE, Inc. compare to competitors in Industrials?
Compared to other companies in Industrials, NIKE, Inc. (NKE) shows: ROIC of 10.0% is above the sector median of 7.4% (Top 40%). FCF margin of 2.3% trails the sector median of 4.7% (Bottom 37% of sector). Gross margin at 40.8% is 7.9 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with NIKE, Inc.?
Investors in NIKE, Inc. (NKE) should monitor these potential warning signs: 1) FCF margin is thin at 2.3%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-12-30. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.