Nick Scali Limited (NCK) AI Stock Analysis

• Market Cap: AU$1.64B
• Dividend Yield: 3.29%
• Average Volume (3M): 230.40K
• Price to Earnings (P/E): 23.7
• Beta (1Y): 1.23
• Revenue Growth: 9.36%
• EPS Growth: -21.69%
• Country: AU
• Employees: 930
• Sector: Real Estate
• Sector Strength: 60
• Industry: Specialty Retail
• EPS (TTM): 0.35
• Shares Outstanding: 85,530,700
• 10 Day Avg. Volume: 199,203
• 30 Day Avg. Volume: 230,404
• PEG Ratio: -1.29
• Price to Book (P/B): 5.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.13
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$20.51
• Price Target Upside: 6.99% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 74 Outperform
• 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 Business Overview & Revenue Model

Company Description

Nick 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 Money

Nick 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

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

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

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
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
492.63M	468.19M	507.72M	440.96M	373.04M	262.48M
	Gross Profit
245.19M	306.80M	322.41M	268.98M	236.75M	164.66M
	EBIT
135.44M	172.97M	194.55M	159.64M	153.27M	86.60M
	EBITDA
163.98M	176.95M	199.52M	158.78M	159.04M	86.60M
	Net Income Common Stockholders
67.64M	80.61M	101.08M	74.92M	84.24M	42.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
87.60M	111.33M	89.25M	74.62M	106.89M	63.04M
	Total Assets
682.54M	704.88M	607.64M	616.39M	489.25M	415.60M
	Total Debt
307.01M	320.37M	318.17M	329.60M	226.98M	214.87M
	Net Debt
219.42M	239.04M	228.91M	294.98M	120.09M	151.83M
	Total Liabilities
415.75M	447.10M	427.73M	475.47M	375.22M	340.19M
	Stockholders Equity
266.79M	257.78M	179.91M	140.93M	114.03M	75.41M
Cash Flow		Free Cash Flow
79.03M	102.72M	121.03M	102.25M	124.26M	82.74M
	Operating Cash Flow
98.75M	131.18M	133.92M	121.23M	139.90M	91.39M
	Investing Cash Flow
-26.79M	-64.91M	-12.89M	-121.50M	-15.62M	1.12M
	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 Price: 19.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NCK	74 Outperform	AU$1.64B	23.74	29.48%	3.29%	9.36%	-21.69%
Sector *	61 Neutral	$2.83B	10.98	0.41%	8438.90%	5.81%	-21.06%
DPZUF		$1.31B	120.86	2.09%	5.04%	―	―
HNORF		$4.43B	15.46	9.58%	4.48%	―	―
1FQ		€274.67M	13.09	14.57%	5.49%	―	―
AX1	70 Neutral	AU$1.11B	16.16	14.35%	5.42%	6.29%	-12.42%
JYC	69 Neutral	AU$130.99M	18.22	21.62%	6.32%	-2.09%	-24.35%

Nick Scali Limited Corporate Events

Nick Scali Limited Announces CFO Transition

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

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

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.