NKE — NIKE, Inc.
Snapshot dated August 31, 2026.
NIKE, Inc. operates as a global designer, marketer, and distributor of athletic footwear, apparel, equipment, and accessories. The company organizes its business primarily through the Nike brand, which spans categories like running, basketball, training, and sportswear, alongside the Converse brand which focuses on lifestyle footwear. It reaches customers through a dual approach of direct-to-consumer digital and retail channels, as well as an extensive network of wholesale partners including specialty retailers and department stores. With headquarters in Beaverton, Oregon, the company employs approximately 83,700 people and maintains a massive global manufacturing and distribution footprint. It stands as a dominant industry leader, frequently competing against entities like Adidas, Puma, and Lululemon in the performance and lifestyle markets. Recently, the company has been navigating a strategic shift toward rejuvenating its direct-to-consumer digital experience while managing inventory levels across its global wholesale partners.
Fair Value / Share
$20.36
Price on August 31, 2026
$39.16
Margin of Safety
-48.01%
Data by Equibles and SEC filings. Figures are as of August 31, 2026 and are not live.
Earnings Yield
Earnings Yield shows how much profit a company generates relative to its share price. EPS ÷ Stock Price.
Stock Price
$39.16
Market Cap
$58,019,456,000
Net Income (TTM)
$3,108,000,000
Diluted Shares
1.48 billion
EPS (TTM)
$2.10
Earnings Yield
5.36%
AI Analysis
NIKE, Inc. shows an earnings yield of 5.36%, calculated using an EPS (TTM) of $2.10 divided by a stock price of $39.16. This figure sits slightly above the 4-5% benchmark often associated with safe, guaranteed alternatives like bonds. Mechanically, this yield implies that the price current investors pay per share currently generates a return on earnings that exceeds the return of those lower-risk instruments. If the share price rises without a corresponding increase in net income, this yield will compress, signaling that the market is pricing in expectations for future growth. Conversely, if earnings decline, the yield would drop even if the price remains steady. This measure does not account for the company's debt obligations or the volatility of future cash flows.
Return on Capital
EBIT ÷ (Net Working Capital + Net Fixed Assets) — how efficiently the business turns capital into profit.
EBIT (TTM)
$4,223,000,000
Net Working Capital
$6,493,000,000
Net Fixed Assets
$4,796,000,000
Invested Capital
$11,289,000,000
Return on Capital
37.41%
AI Analysis
NIKE, Inc. generated an EBIT of $4.2B against $11.3B in invested capital, which consists of $6.5B in net working capital and $4.8B in net fixed assets. This results in a return on capital of 37.41%. By the framework's benchmark, a return on capital of 30% or more indicates an efficient use of capital, placing this company above that threshold. This measure calculates how much operating profit the business generates relative to the tangible capital tied up in its operations. A higher figure suggests the company efficiently compounds capital, though this result does not capture the impact of R&D or marketing investments which are expensed immediately rather than capitalized on the balance sheet. Changes to this percentage would occur if the business required more capital to sustain current profit levels or if operating margins shifted significantly due to pricing or cost changes.
Acquirer's Multiple
Enterprise Value ÷ Operating Earnings — how many years of operating earnings it would take to buy the whole business.
| Company | Operating earnings | Enterprise value | Multiple |
|---|---|---|---|
| DECKDeckers Outdoor Corp | $1.3B | $10.5B | 8.4x |
| NKENIKE, Inc. | $4.2B | $58.4B | 13.8x |
| UAAUnder Armour, Inc. | -$119.7M | $2.4B | — |
Where NKE sits: 13.8x against a peer median of 8.4x (peers: 8.4x) — 64.3% above the median.
Show the enterprise value bridge for each companyHide the enterprise value bridge
NKE
Debt $7.9B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
UAA
Named as a competitor: competes in performance athletic apparel, footwear, and accessories
Debt $591.2M. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
DECK
Named as a competitor: competes in high-performance running and lifestyle footwear through HOKA and UGG
Debt $0. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
Operating earnings — NKE
AI Analysis
NIKE, Inc. (NKE) has an Acquirer's Multiple of 13.8x, based on an enterprise value of $58.4B and operating earnings of $4.2B. Among the analyzed companies with available data, DECK carries the lowest multiple at 8.4x, while NKE has the highest at 13.8x. UAA is losing money right now, so no multiple can be calculated for it, as the measure requires positive operating earnings to derive a ratio. The computed comparison for NKE is 13.8x against a peer median of 8.4x (peers: 8.4x) — 64.3% above the median. This measurement captures the price paid per dollar of normalized operating earnings, but ignores differences in growth profiles or leverage. The comparison gap would close if NIKE’s operating earnings grew significantly or if the enterprise value were to decrease relative to its core profitability, or conversely, if the peer's operating earnings declined or their enterprise value increased.
FS-Score
A 10-check read on financial health, across profitability, balance-sheet stability and operating momentum.
FS-Score
5/10
Decent score — worth a deeper look before investing.
Section 1
Current Profitability
2/3
Current profitability for NIKE is mixed, with the company generating positive accounting returns and free cash flow even as the quality of those earnings remains under pressure.
- Return on Assets is positive at 8.09%
- Free Cash Flow to Total Assets is positive at 5.69%
- Accruals failed as Cash Flow from Operations was only 0.92 times Net Income
While the business is currently profitable, a score improvement would require cash from operations to exceed accounting net income, indicating higher quality, cash-backed earnings.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
FailSection 2
Stability
2/3
The company shows a mixed stability profile, successfully reducing its long-term debt burden and share count while experiencing a decline in near-term liquidity.
- Leverage decreased from 0.22 to 0.15 year over year
- Liquidity declined as the Current Ratio fell from 2.21 to 1.96
- Net Dilution passed as diluted shares fell to 1.48 billion from 1.49 billion
The stability score would strengthen if the current ratio began to rise, signaling that current assets are growing faster than current liabilities.
Change in Leverage (↓ or unchanged)
PassChange in Liquidity (↑ Current Ratio)
FailNet Dilution (annual diluted weighted-average shares, this year vs last)
PassSection 3
Recent Operational Improvements
1/4
Operational improvements are weak, as nearly all measured efficiency and return metrics have declined compared to the previous year.
- ROA fell from 8.80% to 8.09%
- FCFTA declined from 8.93% to 5.69%
- Gross Margin improved slightly from 42.73% to 42.91%
- Asset Turnover decreased from 1.27 to 1.21
This section would only move out of the weak category if the company generated more revenue per dollar of assets and reversed the trend of shrinking returns.
Change in ROA (↑)
FailChange in FCFTA (↑)
FailChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
FailFramework conclusion
NIKE earns a total score of 5/10, a result characterized as solid but mixed. The score is primarily weighed down by weak operational improvements and mixed profitability signals, suggesting that while the company is not in immediate distress, its fundamental efficiency is currently trending lower. This score indicates that any perceived cheapness in the stock may be a reflection of this recent operational softening rather than a simple market mispricing.
- Return on Assets declined from 8.80% to 8.09%
- Asset Turnover fell from 1.21 compared to 1.27 previously
- Leverage improved from 0.22 down to 0.15
- Accruals measure of 0.92 shows cash flow trailing net income
Intrinsic Value (DCF)
A 10-year discounted cash flow, then the bridge from business value to value per share.
Reported cash flow → unlevered free cash flow
Free Cash Flow (reported)
$2.2B
+ After-Tax Interest Expense
$257.4M
= Unlevered Free Cash Flow
$2.4B
Business value (10-year DCF)
PV of Years 1–10
$16.6B
PV of Terminal Value
$14B
= Business Value
$30.5B
Business value → share value
Intrinsic Value (business)
$30.5B
+ Cash & Equivalents
$7.6B
− Debt
$7.9B
= Shareholders' Value
$30.2B
÷ Diluted Shares
1.48 billion
= Fair Value / Share
$20.36
Divided by 1.48 billion diluted shares — the weighted-average diluted count from the most recent quarterly income statement, for the quarter ended 2026-02-28.
Risk bucket → discount rate
mid (12%)
Year-1 FCF
$2.4B
Growth rate (yrs 1–10)
5%
Terminal growth (after yr 10)
3%
AI Analysis
NIKE’s intrinsic value is derived from a ten-year forecast starting at a fixed $2.4B unlevered free cash flow. A mid-risk 12% discount rate was applied to account for the company's strong global market position balanced against ongoing operational headwinds and consumer cyclicality. The forecast assumes a 5.00% annual growth rate over the first decade, reflecting the business's current turnaround efforts. Beyond year ten, a fixed 3.00% terminal growth rate is applied; this is not a company-specific choice but a standard constant used in this framework. The resulting terminal value accounts for 45.7% of the total business value, illustrating that a significant portion of the valuation relies on long-term performance expectations. After adjusting the total intrinsic value of $30.5B by adding cash and subtracting total debt to determine the value belonging to shareholders, the computed fair value per share is $20.36. Compared to the current price of $39.16, this results in a margin of safety of -48.01%, indicating the estimate sits below the current market trading price. This valuation remains most sensitive to the 5.00% growth rate assumption; if operational performance deviates from this forecast, the resulting fair value would shift significantly. This measure does not account for potential changes in capital structure or share buyback activity, which could impact the share count over time.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
5.36% vs ~4-5% bond-yield benchmark
Return on Capital
37.41% ROC vs ~30% benchmark
Acquirer's Multiple
13.8x against a peer median of 8.4x (peers: 8.4x) — 64.3% above the median.
FS-Score
5/10 — Solid but mixed
Intrinsic Value
-48.01% margin of safety
The five checks present a distinct tension between operational performance and current market pricing. Return on Capital at 37.41% indicates the business generates returns well above the 30% benchmark, and the Earnings Yield of 5.36% sits above the 4-5% bond-yield benchmark, suggesting a operational baseline that meets efficiency thresholds. However, these quality metrics are offset by valuation measures that register negatively. The Acquirer's Multiple of 13.8x sits 64.3% above the 8.4x peer median, and the Intrinsic Value calculation indicates a -48.01% margin of safety, showing a significant gap between current market prices and the framework's estimate of value. The FS-Score of 5/10 further reflects a neutral operational profile that lacks consistent expansion across all measured criteria. The disparity here is between a company maintaining operational efficiency and a price that exceeds the thresholds set by these specific valuation models. An improvement in the Intrinsic Value metric would likely shift the overall picture most significantly, as it currently represents the largest deviation from the framework's conservative valuation standards.