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Nick Scali Limited (AU:NCK)
ASX:NCK
Australian Market

Nick Scali Limited (NCK) AI Stock Analysis

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AU

Nick Scali Limited

(Sydney:NCK)

Rating:74Outperform
Price Target:
AU$21.50
▲(12.15%Upside)
Nick Scali Limited's stock score reflects strong financial performance with high profitability and efficient cash flow management, supported by positive technical indicators. However, the decline in revenue raises concerns about future growth prospects, and the stock's valuation suggests it is fairly priced in the market.

Nick Scali Limited (NCK) vs. iShares MSCI Australia ETF (EWA)

Nick Scali Limited Business Overview & Revenue Model

Company DescriptionNick Scali Limited, together with its subsidiaries, engages in sourcing and retailing of household furniture and related accessories primarily in Australia and New Zealand. It offers sofas and armchairs; TV and entertainment units; coffee, side, and console and hallway tables; dinning tables and chairs, and buffet tables and sideboards; mattresses, bed frames, bedside tables, tallboy, and dressers; and rugs, mirrors, and lighting. The company provides its products through a network of 63 stores in Australia and 5 stores in New Zealand, as well as online. Nick Scali Limited was incorporated in 1962 and is based in North Ryde, Australia.
How the Company Makes MoneyNick Scali Limited generates revenue primarily through the sale of furniture and home accessories in its retail stores and online platform. The company's key revenue streams include direct sales from its physical stores, online sales, and a growing presence in the New Zealand market. Nick Scali benefits from strategic sourcing of materials and products, allowing it to offer competitively priced items while maintaining high margins. The company also engages in promotional activities and offers financing options to enhance customer purchasing power, contributing to increased sales. Partnerships with manufacturers and suppliers ensure a steady supply chain, supporting the company's ability to meet customer demand and sustain its revenue growth.

Nick Scali Limited Financial Statement Overview

Summary
Nick Scali Limited exhibits strong profitability and cash flow management, supported by efficient operations and adequate leverage. However, the decline in revenue growth poses a potential risk to future profitability. The company should focus on revitalizing sales growth while continuing to maintain its operational efficiencies and prudent financial management.
Income Statement
75
Positive
Nick Scali Limited demonstrated solid profitability with a gross profit margin of 65.53% and a net profit margin of 17.22% for the latest annual period. However, revenue decreased by 7.79% compared to the previous year, indicating potential challenges in maintaining sales growth. The EBIT margin of 36.94% and EBITDA margin of 37.79% reflect strong operational efficiency.
Balance Sheet
70
Positive
The company's balance sheet shows a stable equity ratio of 36.55% and a manageable debt-to-equity ratio of 1.24, indicating a balanced approach to leveraging. ROE stood at 31.27%, showcasing effective use of equity. However, the increase in total liabilities over recent years suggests rising financial obligations that need monitoring.
Cash Flow
78
Positive
Operating cash flow generation remains robust with a favorable operating cash flow to net income ratio of 1.63, indicating strong cash generation relative to profits. Free cash flow decreased by 15.11%, but the company maintains healthy free cash flow compared to net income, reflecting efficient cash management.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
492.63M468.19M507.72M440.96M373.04M262.48M
Gross Profit
245.19M306.80M322.41M268.98M236.75M164.66M
EBIT
135.44M172.97M194.55M159.64M153.27M86.60M
EBITDA
163.98M176.95M199.52M158.78M159.04M86.60M
Net Income Common Stockholders
67.64M80.61M101.08M74.92M84.24M42.08M
Balance SheetCash, Cash Equivalents and Short-Term Investments
87.60M111.33M89.25M74.62M106.89M63.04M
Total Assets
682.54M704.88M607.64M616.39M489.25M415.60M
Total Debt
307.01M320.37M318.17M329.60M226.98M214.87M
Net Debt
219.42M239.04M228.91M294.98M120.09M151.83M
Total Liabilities
415.75M447.10M427.73M475.47M375.22M340.19M
Stockholders Equity
266.79M257.78M179.91M140.93M114.03M75.41M
Cash FlowFree Cash Flow
79.03M102.72M121.03M102.25M124.26M82.74M
Operating Cash Flow
98.75M131.18M133.92M121.23M139.90M91.39M
Investing Cash Flow
-26.79M-64.91M-12.89M-121.50M-15.62M1.12M
Financing Cash Flow
-53.41M-74.19M-66.40M-72.00M-80.43M-65.76M

Nick Scali Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price19.17
Price Trends
50DMA
17.61
Positive
100DMA
16.84
Positive
200DMA
15.76
Positive
Market Momentum
MACD
0.39
Positive
RSI
63.39
Neutral
STOCH
48.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:NCK, the sentiment is Positive. The current price of 19.17 is above the 20-day moving average (MA) of 18.90, above the 50-day MA of 17.61, and above the 200-day MA of 15.76, indicating a bullish trend. The MACD of 0.39 indicates Positive momentum. The RSI at 63.39 is Neutral, neither overbought nor oversold. The STOCH value of 48.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:NCK.

Nick Scali Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUNCK
74
Outperform
AU$1.64B23.7429.48%3.29%9.36%-21.69%
61
Neutral
$2.83B10.980.41%8438.90%5.81%-21.06%
$1.31B120.862.09%5.04%
$4.43B15.469.58%4.48%
DE1FQ
€274.67M13.0914.57%5.49%
AUAX1
70
Neutral
AU$1.11B16.1614.35%5.42%6.29%-12.42%
AUJYC
69
Neutral
AU$130.99M18.2221.62%6.32%-2.09%-24.35%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:NCK
Nick Scali Limited
19.17
5.53
40.54%
DPZUF
Domino's Pizza Enterprises Limited
13.90
-10.21
-42.35%
HNORF
Harvey Norman Holdings Ltd
3.56
0.78
28.06%
DE:1FQ
Adairs Ltd.
1.50
0.48
47.06%
AU:AX1
Accent Group Ltd
1.84
-0.01
-0.54%
AU:JYC
Joyce Corporation Ltd
4.43
0.92
26.21%

Nick Scali Limited Corporate Events

Nick Scali Limited Announces CFO Transition
May 2, 2025

Nick Scali Limited announced the transition to a new Chief Financial Officer, with Sheila Lines retiring to pursue non-executive board roles. She will continue to provide strategic advice post-retirement. Kylie Archer, an experienced finance executive, will succeed Sheila as CFO starting 1 July 2025, joining the company on 19 May to ensure a smooth transition. This leadership change is significant as it follows the company’s recent expansion into the UK market.

Perpetual Limited Increases Stake in Nick Scali Limited
Apr 9, 2025

Perpetual Limited and its related bodies corporate have increased their substantial holding in Nick Scali Limited, raising their voting power from 7.534% to 8.552%. This change in interest reflects a growing confidence in Nick Scali’s market position and potential for future growth, potentially impacting the company’s strategic decisions and shareholder dynamics.

Pinnacle Investment Acquires Substantial Stake in Nick Scali
Mar 14, 2025

Pinnacle Investment Management Group Limited has become a substantial holder in Nick Scali Limited, acquiring a 5.03% voting power through ordinary fully paid shares. This development indicates a strategic investment move by Pinnacle, potentially impacting Nick Scali’s shareholder dynamics and signaling confidence in the company’s market performance.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.