Which is more compelling pick right now? – NIKE, Inc. (NKE), Blue Apron Holdings, Inc. (APRN)

The shares of NIKE, Inc. have increased by more than 14.05% this year alone. The shares recently went up by 2.65% or $1.84 and now trades at $71.34. The shares of Blue Apron Holdings, Inc. (NYSE:APRN), has slumped by -34.99% year to date as of 05/16/2018. The shares currently trade at $2.62 and have been able to report a change of -1.87% over the past one week.

The stock of NIKE, Inc. and Blue Apron Holdings, Inc. were two of the most active stocks on Wednesday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Next 5Y EPS Growth: 7.58% versus -11.00%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that NKE will grow it’s earning at a 7.58% annual rate in the next 5 years. This is in contrast to APRN which will have a positive growth at a -11.00% annual rate. This means that the higher growth rate of NKE implies a greater potential for capital appreciation over the years.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. NKE has an EBITDA margin of 14.38%, this implies that the underlying business of NKE is more profitable. The ROI of NKE is 25.30% while that of APRN is -54.10%. These figures suggest that NKE ventures generate a higher ROI than that of APRN.

Cash Flow

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, NKE’s free cash flow per share is a positive 0.66.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for NKE is 2.70 and that of APRN is 2.90. This implies that it is easier for NKE to cover its immediate obligations over the next 12 months than APRN. The debt ratio of NKE is 0.36 compared to 0.00 for APRN. NKE can be able to settle its long-term debts and thus is a lower financial risk than APRN.


NKE currently trades at a forward P/E of 26.60, a P/B of 11.83, and a P/S of 3.24 while APRN trades at a P/B of 2.54, and a P/S of 0.66. This means that looking at the earnings, book values and sales basis, NKE is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of NKE is currently at a -0.03% to its one-year price target of 71.36. Looking at its rival pricing, APRN is at a -46.75% relative to its price target of 4.92.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), NKE is given a 2.20 while 2.60 placed for APRN. This means that analysts are more bullish on the outlook for APRN stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for NKE is 3.19 while that of APRN is just 3.86. This means that analysts are more bullish on the forecast for NKE stock.


The stock of NIKE, Inc. defeats that of Blue Apron Holdings, Inc. when the two are compared, with NKE taking 7 out of the total factors that were been considered. NKE happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, NKE is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for NKE is better on when it is viewed on short interest.

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