NIKE, Inc. (NKE) Stock Valuation — DCF Analysis
Apparel - Footwear & Accessories · NYSE
Current Price
$44.93
Intrinsic Value
$29.64
-51.6% margin of safety
COMPETITIVE MOAT
↑Brand Strength & Loyalty
Nike's iconic brand commands immense consumer loyalty and aspirational appeal. This allows for premium pricing and sustained demand across its product lines.
↑Innovation & Design Leadership
Continuous investment in R&D and athlete-driven product development creates a pipeline of innovative footwear and apparel. This keeps Nike at the forefront of athletic performance and style.
↑Global Distribution Network
An extensive and efficient global supply chain and retail presence ensures widespread product availability. This reach is difficult for competitors to replicate.
INVESTMENT RISKS
↓Intensifying Competition
Rival brands like Lululemon are gaining traction, particularly in specific segments. This necessitates constant innovation and marketing to maintain market share.
↓Supply Chain Disruptions
Geopolitical events and global logistics challenges can impact production and delivery. This can lead to inventory issues and missed sales opportunities.
↓Shifting Consumer Preferences
Rapid changes in fashion trends and athletic demands require agility. Failure to adapt quickly can result in outdated product offerings and reduced demand.
Base case
NKE base case valuation
A base case discounted cash flow model for NKE estimates an intrinsic value of about $29.64 per share, against a current price of $44.93. The model assumes 14.2% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$29.64
Margin of safety
-51.6%
Expected annual return
-8.0%
Base case assumptions: 14.2% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the NKE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for NIKE, Inc. respond.
Open DCF Calculator for NKECompany Overview
NIKE, Inc., through its various subsidiaries, operates as a global enterprise focused on the design, development, marketing, and sale of athletic footwear, apparel, equipment, and accessories for all ages and genders. Beyond its primary offerings, the company provides a range of athletic and casual footwear, clothing, and accessories under the notable Jumpman trademark. It also distributes a variety of casual sneakers, apparel, and accessories, featuring well-known brands like Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell. Under the NIKE brand itself, the company supplies a comprehensive line of performance sports gear and accessories, such as bags, socks, sports balls, eyewear, timepieces, digital devices, bats, gloves, and protective equipment. Additionally, NIKE sells various plastic products to other manufacturers. The company also markets sportswear adorned with licensed logos from college and professional sports teams and leagues. Furthermore, it engages in licensing arrangements, allowing unaffiliated parties to manufacture and sell apparel, digital devices, applications, and other sports equipment under NIKE-owned trademarks. Its extensive product catalog reaches consumers globally through diverse channels, including specialized footwear, sporting goods, athletic specialty, department, skate, tennis, and golf stores. Distribution occurs via NIKE's proprietary retail outlets, digital e-commerce platforms, independent distributors, authorized licensees, and sales representatives. Founded in 1964, the company was originally named Blue Ribbon Sports, Inc., before officially becoming NIKE, Inc. in 1971, and maintains its corporate headquarters in Beaverton, Oregon.
Financial Metrics — NKE Stock Valuation Data
Revenue/Share (TTM)
$31.46
FCF/Share (TTM)
$0.71
ROIC (TTM)
7.9%
ROE (TTM)
16.4%
P/FCF
63.4x
EV/EBITDA
20.3x
FCF Yield
1.58%
Debt/Equity
0.79x
Based on trailing twelve-month data, NKE shows a free cash flow per share of $0.71 and a ROIC of 7.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 63.4x and FCF yield of 1.58% are important context metrics when evaluating NKE's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of NKE?
NIKE, Inc. currently generates $0.71 in free cash flow per share. At the current price of $44.93, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is NKE undervalued?
NKE trades at a P/FCF ratio of 63.4x with a free cash flow yield of 1.58%. This elevated P/FCF suggests the market is pricing in significant future growth. However, whether NKE is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value NKE stock using DCF?
To perform a DCF valuation on NIKE, Inc.: (1) Start with the trailing free cash flow per share ($0.71) as the base, (2) project future FCF growth over 5-10 years based on Apparel - Footwear & Accessories industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting NKE's risk profile — with a debt-to-equity of 0.79x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to NKE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For NIKE, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Apparel - Footwear & Accessories trends, then discounting those amounts to today's dollars. NKE's ROIC of 7.9% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect NKE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NKE, with a debt-to-equity ratio of 0.79x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 20.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See NKE PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value NKE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.