Investment Thesis
Nike demonstrates exceptional profitability with 20.9% ROE and 42.9% gross margins, generating strong free cash flow of $2.2B annually while maintaining a healthy balance sheet. However, the concerning 0.2% revenue growth and -2.8% EPS decline signal stagnation that requires near-term reversal to sustain shareholder value creation.
Strengths
- Exceptional ROE of 20.9% demonstrating superior capital efficiency
- Strong free cash flow of $2.2B with robust 4.7% FCF margin
- Solid balance sheet with 1.96x current ratio and conservative 0.53x debt/equity leverage
Risks
- Negligible revenue growth of 0.2% YoY indicating market stagnation or lost competitive position
- Declining diluted EPS of -2.8% suggests profitability per share is contracting despite stable margins
- Flat growth trajectory may constrain long-term shareholder returns without operational improvements
Key Metrics to Watch
- Revenue growth acceleration and market share trends
- Diluted EPS stabilization and margin expansion opportunities
- Free cash flow deployment strategy and capital allocation efficiency
Financial Metrics
Revenue
46.4B
Net Income
3.1B
EPS (Diluted)
$2.10
Free Cash Flow
2.2B
Total Assets
38.4B
Cash
7.6B
Profitability Ratios
Gross Margin
42.9%
Operating Margin
8.4%
Net Margin
6.7%
ROE
20.9%
ROA
8.1%
FCF Margin
4.7%
Balance Sheet & Liquidity
Current Ratio
1.96x
Quick Ratio
1.74x
Debt/Equity
0.53x
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
7.9B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-08-03T06:02:49.304297 |
Data as of: 2026-05-31 |
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