NKE — NIKE, Inc.
Snapshot dated October 5, 2026.
NIKE, Inc. designs, develops, and markets athletic footwear, apparel, equipment, and accessories under its own brand and the Jordan Brand. The company generates the majority of its revenue through its wholesale business, selling to multi-brand retailers and independent distributors, alongside a growing direct-to-consumer strategy executed through its Nike Direct operations and digital platforms. Its core segments include the Nike Brand, which contributes the vast majority of total revenue, and Converse, a wholly-owned subsidiary that operates as a separate brand. NIKE serves a global customer base across North America, Europe, the Middle East, Africa, Greater China, and Asia Pacific, operating a complex supply chain with manufacturing partners primarily located in Vietnam, Indonesia, and China. As a dominant force in the global sportswear industry, NIKE competes against established athletic apparel firms like Adidas, Under Armour, and Lululemon. Recently, the company has focused on a restructuring initiative intended to streamline its organization and pivot towards higher-margin product categories while navigating shifting consumer demand in major international markets.
Fair Value / Share
$19.23
Price on October 5, 2026
$33.63
Upside to fair value
-42.8%
Data by Equibles and SEC filings. Figures are as of October 5, 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
$33.63
Market Cap
$49,906,225,000
Net Income (TTM)
$3,093,000,000
Diluted Shares
1.48 billion
EPS (TTM)
$2.08
Earnings Yield
6.2%
AI Analysis
NIKE, Inc. currently displays an earnings yield of 6.20%, a figure derived from its EPS of $2.08 and a stock price of $33.63. This yield sits above the 4-5% return typically available from safe, guaranteed bond alternatives. A yield in this range suggests that the current share price attributes a specific cost to the company's annual net income, implying that the market is not pricing in significant, rapid growth expectations relative to these bond-like alternatives. For this yield to increase, the company's EPS would need to rise while the price remains stable, or the share price would need to decline. This metric considers only current profitability and does not capture potential changes in the company's future growth trajectory, competitive landscape, or debt obligations.
Return on Capital
EBIT ÷ (Net Working Capital + Net Fixed Assets) — how efficiently the business turns capital into profit.
EBIT (TTM)
$4,222,000,000
Net Working Capital
$7,361,000,000
Net Fixed Assets
$4,887,000,000
Invested Capital
$12,248,000,000
Return on Capital
34.47%
AI Analysis
NIKE, Inc. generated an EBIT of $4.2B against $12.2B in invested capital (comprising $7.4B in net working capital and $4.9B in net fixed assets). This results in a return on capital of 34.47%. By the framework's benchmark, this reading sits above the 30% threshold for an efficient use of capital, indicating the business generates a high level of profit relative to the tangible operating capital required to sustain its operations. This measure relies on historical accounting data and focuses strictly on operating efficiency rather than future growth potential or intangible assets like brand value, which are excluded from the invested capital calculation. A shift in this percentage would require a change in either the operating profit generated or the efficiency with which the company manages its necessary working capital and physical assets.
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 | $9.4B | 7.5x |
| NKENIKE, Inc. | $4.2B | $50.9B | 12.1x |
| UAAUnder Armour, Inc. | -$119.7M | $2.2B | — |
Where NKE sits: 12.1x against a peer median of 7.5x (peers: 7.5x) — 59.9% 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. The company separately reports $3.2B of operating lease liabilities as of 2026-08-31 ($2.7B non-current, $473M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
UAA
Named as a competitor: competes in athletic performance apparel, footwear, and sports accessories
Debt $591.2M. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $784.9M of operating lease liabilities as of 2026-06-30 ($632.3M non-current, $152.6M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
DECK
Named as a competitor: competes in performance running and lifestyle footwear through brands like HOKA
Debt $0. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $472.3M of operating lease liabilities as of 2026-06-30 ($399M non-current, $73.4M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
Operating earnings — NKE
AI Analysis
The Acquirer's Multiple measures the enterprise cost of acquiring a business relative to its core operating earnings. For NIKE, Inc. (NKE), the framework calculates a multiple of 12.1x, based on an enterprise value of $50.9B and $4.2B in operating earnings. Competitor DECK trades at a multiple of 7.5x, derived from an enterprise value of $9.4B and $1.3B in operating earnings. Under Armour (UAA) has an enterprise value of $2.2B, but because it is losing money right now, no multiple can be calculated. Among the companies with a valid numeric multiple, DECK has the lowest figure, while NKE has the highest. NKE reports a multiple of 12.1x against a peer median of 7.5x (peers: 7.5x) — 59.9% above the median. This difference in multiples could change if the gap in capital structure or business model intensity between these entities closes, or if operating earnings for these firms adjust significantly.
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
Profitability is Mixed as the company maintains positive returns but shows signs that reported earnings may not be fully backed by cash flow.
- Return on Assets is positive at 8.09%
- Free Cash Flow to Total Assets is positive at 5.69%
- Accruals failed the check with a Cash Flow from Operations to Net Income ratio of 0.92
A score of 2/3 indicates the business remains profitable, though a shift in the accruals ratio toward a value above 1.0 would signal higher earnings quality.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
FailSection 2
Stability
2/3
The balance sheet is Mixed, characterized by a successful reduction in long-term debt and share count offset by a decline in the current ratio.
- 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 from 1.49 billion to 1.48 billion
Maintaining stability would require reversing the downward trend in the current ratio while continuing to manage the debt-to-asset profile.
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, with only a minor gain in pricing power or cost efficiency failing to offset broad declines in efficiency and returns.
- Return on Assets declined from 8.80% to 8.09%
- Free Cash Flow to Total Assets fell 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 improve if the company generated more revenue per dollar of assets or increased its cash flow relative to its asset base.
Change in ROA (↑)
FailChange in FCFTA (↑)
FailChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
FailFramework conclusion
NIKE, Inc. earns a total FS-Score of 5/10, a result driven by a weak operational trend despite maintaining positive absolute profitability. This mid-range score suggests that while the company is not in immediate financial distress, the business is currently experiencing a year-over-year decline in efficiency and liquidity. The score indicates that any perceived cheapness in the stock may be tied to these softening fundamentals rather than a simple market mispricing.
- Return on Assets remains positive at 8.09% but has declined from 8.80%
- Leverage has improved, with the ratio falling from 0.22 to 0.15
- Asset Turnover dropped to 1.21 from a prior level of 1.27
- Free Cash Flow to Total Assets decreased year over year to 5.69%
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)
$2.1B
+ After-Tax Interest Expense
$256.2M
= Unlevered Free Cash Flow
$2.4B
Business value (10-year DCF)
PV of Years 1–10
$16B
PV of Terminal Value
$13.5B
= Business Value
$29.5B
Terminal value share
45.7%
Business value → share value
Intrinsic Value (business)
$29.5B
+ Cash & Equivalents
$6.9B
− Debt
$7.9B
= Shareholders' Value
$28.5B
÷ Diluted Shares
1.48 billion
= Fair Value / Share
$19.23
Divided by 1.48 billion diluted shares — the weighted-average diluted count from the most recent quarterly income statement, for the quarter ended 2026-08-31.
Risk bucket → discount rate
mid (12%)
Year-1 FCF
$2.4B
Trailing twelve months.
FY2024 $6.6B · FY2025 $3.3B · FY2026 $2.2B
Growth rate (yrs 1–10)
5%
Terminal growth (after yr 10)
3%
AI Analysis
The valuation framework assesses Nike, Inc. based on a forecasted ten-year period starting from a fixed Year-1 free cash flow of $2.4B. The 12% discount rate reflects a mid-risk classification, balancing Nike's position as a global leader in athletic footwear with the sensitivity of its discretionary revenue to economic cycles and recent instability in free cash flow, which has compressed from historical peaks. A growth rate of 5.00% is applied over the ten-year projection, assuming that the current cash-generation level represents a cyclical low from which the business will stabilize and gradually recover, while acknowledging the limitations imposed by market saturation and intensifying competition. A terminal growth rate of 3% is used for the period beyond year ten; this is a fixed figure applied across all companies in the framework rather than a specific judgment on this business. This calculation arrives at a fair value per share of $19.23, determined by aggregating the present value of forecasted cash flows and adding net cash—calculated as cash and equivalents minus total debt—before dividing by the 1.48 billion diluted shares outstanding. Comparing this estimate to the current price of $33.63 results in an upside to fair value of -42.80%. Because the current price is above the fair value, there is no margin of safety available in this estimate. If the inputs for this valuation were to shift, the growth rate assumption would likely have the most significant impact on the final result, as it dictates the trajectory of cash generation over the coming decade.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
6.2% vs ~4-5% bond-yield benchmark
Return on Capital
34.47% ROC vs ~30% benchmark
Acquirer's Multiple
12.1x against a peer median of 7.5x (peers: 7.5x) — 59.9% above the median.
FS-Score
5/10 — Solid but mixed
Intrinsic Value
-42.8% upside to fair value
The framework presents a conflict between NIKE’s operational efficiency and its current market price. On the quality side, the 34.47% Return on Capital and the 6.2% Earnings Yield signal strong profitability and yield relative to benchmark comparisons. However, the FS-Score of 5/10 suggests inconsistent performance across the broader balance sheet and cash flow metrics. This operational profile is contrasted by the valuation measurements, which reflect significant tension. The Acquirer's Multiple of 12.1x sits 59.9% above the peer median of 7.5x, and the price currently reflects a -42.8% upside to fair value, indicating the market has priced the stock above the calculated intrinsic estimate. Consequently, the framework measures a company that generates returns above its benchmarks, yet currently commands a price that exceeds the derived fair value. A shift in the FS-Score would likely have the most significant impact on the overall picture, as improvement here would clarify whether the operational quality is robust or merely situational.
Comments
Notes from readers on NKE — one each. Comments stay with the company, so they carry across to a later snapshot, and each one shows the date it was written.
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