Switch to:
Nike Inc (NYSE:NKE)
Intrinsic Value: Projected FCF
$24.47 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Nike Inc's projected FCF intrinsic value is $24.47. The stock price of Nike Inc is $56.00. Therefore, Nike Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 2.3.

NKE' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 0.84   Max: 2.93
Current: 2.29

0.84
2.93

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Nike Inc was 2.93. The lowest was 0.84. And the median was 1.51.

NKE's Price to Intrinsic Value: Projected FCF is ranked lower than
74% of the 497 Companies
in the Global Footwear & Accessories industry.

( Industry Median: 9999.00 vs. NKE: 2.29 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Nike Inc's FCF(6 year avg) is calculate as

Nike Inc Quarterly Data

201308201311201402201405201408201411201502201505201508201511
total_freecashflow 3731265161,1184216391,5551,102164257
201102201105201108201111201202201205201208201211201302201305
total_freecashflow 211713-273652087154285672721,167
201002201005201008201011
total_freecashflow 4451,180123333

Add all the Free Cash Flow together and divide 6 will get Nike Inc's FCF(6 year avg) = $2,161.83.

Nike Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Nov15)*0.8)/Shares Outstanding
=(14.8626533105*2161.83333333+13405*0.8)/1751.400
=24.47

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Nike Inc's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=56.00/24.4687560514
=2.29

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Nike Inc Annual Data

May06May07May08May09May10May11May12May13May14May15
Projected FCF 9.2311.3412.6112.9814.0313.8314.9417.3320.1525.01

Nike Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
Projected FCF 18.5017.8618.6620.1521.0722.0424.6625.0124.6424.47
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK