Nike, Inc. (NYSE: NKE) 17 March 2014 Rushil Surapaneni| Saad Hirani

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Nike, Inc. (NYSE: NKE)

17 March 2014

Rushil Surapaneni| Saad Hirani

AGENDABusiness Overview

Company Fundamentals

Chart Analysis

Competitors

Competitive Analysis

Entry strategy

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BUSINESS OVERVIEW – SPORTS EQUIPMENT & SPORTSWEAR

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Business Overview

Nike has demonstrated signs of performing far above the markets and possesses a track record of consistent growth.

Since its establishment in 1964, Nike has shown continuous substantial growth as a corporation both domestically and globally.

With sound financial practices and innovation strategies, it is likely Nike will continue to grow between 10-15% annually

Business Overview | Company Analysis | Company Fundamentals | Charts | Competitors | Summary

A major publicly traded sportswear and equipment supplier based in the United States.

Operates 700 stores in 46 different countries. Growth Analysis

Stock Overview

Incredible track record Consistently outperforms the

S&P 500.

COMPANY ANALYSIS-NIKE

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Business Model


Spending money away from traditional media and moving more money into social media.

For athletes, Nike zeroes in on athletes who demonstrate a high ROI as measured by number of Facebook fans and Twitter followers they have.

Factors Behind Growth

Increasing global market share: Nike has been showing

strong growth in North American market and equally impressive in emerging markets.

Company has forecasted significantly improved future orders in China, indicating its sales will pick up once again there.

Decent valuation compared to competition.

Recently voted as world’s most innovative company in 2013.

Secular trend of growing fitness consciousness and rapidly rising income levels in emerging economies

COMPANY FUNDAMENTALS

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Essential Statistics

Nike has seen consistent revenue growth, growth in EPS, and is not particularly volatile. . The company possesses

healthy cash flows and demonstrates interests are aligned with shareholders.

Beta: 0.7 Market Cap: $70.36 bn P/E: 25.35 | Earnings per

share : 3.13 ROI: 25.05% | ROA: 13.66%


2011 2012 20130

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0.00

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Revenue and Operating Margins

Year

Rev

enue

(M

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Ope

ratin

g M

argi

n (%

)

Highlights Cash to Debt ratio of 1.19

indicates “cash is king” is part of its growth strategy

In the past 12 months the stock has gained 43.2%.

In Q2 2014, revenues from North America grew by 9%, while Central & Eastern Europe and Western Europe saw revenue growth by 14% each.

CHART ANALYSIS

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Source: Google Finance

COMPETITORS

Primary competitors include Adidas AG, PUMA Se, and Under Armour.

Nike reported an 11% rise in sales in western Europe in the 1st half of fiscal 2014, while Adidas posted a fall of 6% at constant currencies in its 3rd quarter.

Under Armour’s lack of meaningful international growth and footwear brand being too small leads many analysts to believe in a major dip in Under Armour stock price.

Adidas losing ground to Nike in European markets and Nike has more strategically diversified itself with Cole Haan, Hurley, and Jordan.

Sources: 7


Primary Competitors Primary Flaws of Competition

SUMMARY

Strong historical growth and opportunities.

Healthy cash flows and operations.

Interests aligned with shareholders.

Highly innovative and continued expansion in domestic and international markets.

Stronger market hold compared to competitors.

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Thesis Points We plan to invest in Nike as

soon as approval is given because of the indicators of continued growth in future earnings reports and earnings to beat Wall Street expectations

Earnings release: 20 March 2014

In Conclusion

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Nike, Inc. (NYSE: NKE) 17 March 2014 Rushil Surapaneni| Saad Hirani