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โ Quiver Quantitative
๐จ BREAKING: We just received data on new stock purchases by Representative Marjorie Taylor Greene.
She bought up to $90K of stock on Wednesday.
Here they are the trades: https://t.co/Khsl8qeq7O
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๐จ BREAKING: We just received data on new stock purchases by Representative Marjorie Taylor Greene.
She bought up to $90K of stock on Wednesday.
Here they are the trades: https://t.co/Khsl8qeq7O
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Offshore
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โ Dimitry Nakhla | Babylon Capitalยฎ
A sober valuation analysis on $NKE ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 26.49x
โข10-Year Mean: 29.59x
โขNTM FCF Yield: 3.70%
โข10-Year Mean: 3.22%
As you can see, $NKE appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share & ~15 MORE in FCF* per share ๐ง ***
Before we get into valuation, letโs take a look at why $NKE is a good business
BALANCE SHEETโ
โขCash & Short-Term Inv: $11.58B
โขLong-Term Debt: $10.59B
$NKE has a strong balance sheet, an AA- S&P Credit Rating & 27x FFO Interest Coverage
RETURN ON CAPITALโ
โข2019: 35.7%
โข2020: 14.2%
โข2021: 27.3%
โข2022: 22.1%
โข2023: 22.4%
โข2024: 25.4%
RETURN ON EQUITYโ
โข2019: 42.7%
โข2020: 29.7%
โข2021: 55.0%
โข2022: 43.1%
โข2023: 34.6%
โข2024: 40.1%
$NKE has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $27.80B
โข2024: $51.36B
โขCAGR: 6.33%
FREE CASH FLOWโ *
โข2014: $2.12B
โข2024: $6.62B
โขCAGR: 12.06%
*FCF isnโt the most reliable figure in assessing $NKE valuation, despite how high the FCF Yield may be today
NORMALIZED EPSโ
โข2014: $1.49
โข2024: $3.95
โขCAGR: 10.24%
SHARE BUYBACKSโ
โข2014 Shares Outstanding: 1.81B
โขLTM Shares Outstanding: 1.53B
By reducing its shares outstanding ~15.4%, $NKE increased its EPS by ~18.2% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 44.7%
โขLTM Operating Margins: 13.1%
โขLTM Net Income Margins: 11.1%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS & ~15% more in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $NKE has to grow earnings at a 13.25% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be less than the (13.25%) required growth rate:
2025E: $3.15 (-20.3% YoY) *FY May
2026E: $3.62 (15.1% YoY)
2027E: $3.96 (9.4% YoY)
$NKE has a decent track record of meeting analyst estimates ~2 years out, but letโs assume $NKE ends 2027 with $3.96 in EPS & see its CAGR potential assuming different multiples:
27x P/E: $106.92๐ต โฆ ~11.4% CAGR
26x P/E: $102.96๐ต โฆ ~9.9% CAGR
25x P/E: $99.00๐ต โฆ ~8.4% CAGR
24x P/E: $95.04๐ต โฆ ~6.8% CAGR
As you can see, $NKE appears to have attractive return potential if we assume a >27x multiple which is below its 10-year average of 29.54x (albeit a bit elevated due to valuation spike between 2020-2022 & partly why Iโm not willing to rely on this assumption)
With 25x earnings being a solid level of fundamental support, $NKE appears to have decent growth potential but not enough to get me interested
Yet, even assuming 25x, weโre not left with much of a margin of safety
Iโd consider $NKE a strong purchase with a substantial margin of safety closer to 23x NTM earnings or closer to $72๐ต (~13% below todays price)
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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A sober valuation analysis on $NKE ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 26.49x
โข10-Year Mean: 29.59x
โขNTM FCF Yield: 3.70%
โข10-Year Mean: 3.22%
As you can see, $NKE appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share & ~15 MORE in FCF* per share ๐ง ***
Before we get into valuation, letโs take a look at why $NKE is a good business
BALANCE SHEETโ
โขCash & Short-Term Inv: $11.58B
โขLong-Term Debt: $10.59B
$NKE has a strong balance sheet, an AA- S&P Credit Rating & 27x FFO Interest Coverage
RETURN ON CAPITALโ
โข2019: 35.7%
โข2020: 14.2%
โข2021: 27.3%
โข2022: 22.1%
โข2023: 22.4%
โข2024: 25.4%
RETURN ON EQUITYโ
โข2019: 42.7%
โข2020: 29.7%
โข2021: 55.0%
โข2022: 43.1%
โข2023: 34.6%
โข2024: 40.1%
$NKE has strong return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $27.80B
โข2024: $51.36B
โขCAGR: 6.33%
FREE CASH FLOWโ *
โข2014: $2.12B
โข2024: $6.62B
โขCAGR: 12.06%
*FCF isnโt the most reliable figure in assessing $NKE valuation, despite how high the FCF Yield may be today
NORMALIZED EPSโ
โข2014: $1.49
โข2024: $3.95
โขCAGR: 10.24%
SHARE BUYBACKSโ
โข2014 Shares Outstanding: 1.81B
โขLTM Shares Outstanding: 1.53B
By reducing its shares outstanding ~15.4%, $NKE increased its EPS by ~18.2% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 44.7%
โขLTM Operating Margins: 13.1%
โขLTM Net Income Margins: 11.1%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~12% MORE in EPS & ~15% more in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $NKE has to grow earnings at a 13.25% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be less than the (13.25%) required growth rate:
2025E: $3.15 (-20.3% YoY) *FY May
2026E: $3.62 (15.1% YoY)
2027E: $3.96 (9.4% YoY)
$NKE has a decent track record of meeting analyst estimates ~2 years out, but letโs assume $NKE ends 2027 with $3.96 in EPS & see its CAGR potential assuming different multiples:
27x P/E: $106.92๐ต โฆ ~11.4% CAGR
26x P/E: $102.96๐ต โฆ ~9.9% CAGR
25x P/E: $99.00๐ต โฆ ~8.4% CAGR
24x P/E: $95.04๐ต โฆ ~6.8% CAGR
As you can see, $NKE appears to have attractive return potential if we assume a >27x multiple which is below its 10-year average of 29.54x (albeit a bit elevated due to valuation spike between 2020-2022 & partly why Iโm not willing to rely on this assumption)
With 25x earnings being a solid level of fundamental support, $NKE appears to have decent growth potential but not enough to get me interested
Yet, even assuming 25x, weโre not left with much of a margin of safety
Iโd consider $NKE a strong purchase with a substantial margin of safety closer to 23x NTM earnings or closer to $72๐ต (~13% below todays price)
#stocks #investing
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐, ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ ๐จ๐ซ ๐๐๐๐ฎ๐ซ๐๐๐ฒ.
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AkhenOsiris
$NVDA
Evercore:
They observe that Nvidia shares have experienced two significant corrections, each over 50%, in recent history: one in the second half of 2018, occurring one quarter before peak capital expenditure (CapEx) when the stock was trading at a price-to-earnings (P/E) ratio of 38, and another in 2021-22, four quarters before peak CapEx, starting with a P/E of 67.
With peak CapEx forecasted for the fourth quarter of 2025 and NVIDIA's current P/E at 39, the analysts do not anticipate a significant sell-off in the stock before mid-2025.
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$NVDA
Evercore:
They observe that Nvidia shares have experienced two significant corrections, each over 50%, in recent history: one in the second half of 2018, occurring one quarter before peak capital expenditure (CapEx) when the stock was trading at a price-to-earnings (P/E) ratio of 38, and another in 2021-22, four quarters before peak CapEx, starting with a P/E of 67.
With peak CapEx forecasted for the fourth quarter of 2025 and NVIDIA's current P/E at 39, the analysts do not anticipate a significant sell-off in the stock before mid-2025.
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โ Hidden Value Gems
RT @HiddenValueGems: Li Luโs advice on how to succeed in investing ๐๐ผ
Quote of the day #71 https://t.co/rFHSsVdUQl
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RT @HiddenValueGems: Li Luโs advice on how to succeed in investing ๐๐ผ
Quote of the day #71 https://t.co/rFHSsVdUQl
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โ Quiver Quantitative
In June, Marjorie Taylor Greene bought stock in Crowdstrike. It has fallen 29% since.
In July, she bought stock in Dell. It has fallen 13% since.
She just bought stock in Intel.
Will be watching $INTC closely. https://t.co/3Df2SYn3Ns
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In June, Marjorie Taylor Greene bought stock in Crowdstrike. It has fallen 29% since.
In July, she bought stock in Dell. It has fallen 13% since.
She just bought stock in Intel.
Will be watching $INTC closely. https://t.co/3Df2SYn3Ns
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โ Stock Analysis Compilation
Stock Analysis Compilation #54 is in your inbox ๐ฅ
(link below)
37 free analyses from the best hedge funds & newsletters :
$BABA $TCEHY $AMZN $AXON $CMG $CLPT $GPRK $GT $MEDP $MNDY $MS $OCC $OEC $PLTR $PAYC $PINS $TXN $WBS $DPZ $GLASF and many more https://t.co/9UOyZMmzWZ
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Stock Analysis Compilation #54 is in your inbox ๐ฅ
(link below)
37 free analyses from the best hedge funds & newsletters :
$BABA $TCEHY $AMZN $AXON $CMG $CLPT $GPRK $GT $MEDP $MNDY $MS $OCC $OEC $PLTR $PAYC $PINS $TXN $WBS $DPZ $GLASF and many more https://t.co/9UOyZMmzWZ
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