Ares Management Corporation (ARES-PA) Discounted Future Market Cap

Ares Management Corporation

ARES-PA (NYSE)

(%)

Valuation
Ares Management Corporation Discounted Future Market Cap

"""
    Model: Discounted Future Market Cap

# Render model description
model.render_description(r"""
## Discounted Future Market Cap

This model estimates the intrinsic value of a common share by projecting the Future Market Capitalization using the estimated PE Ratio and then discounting it to the Present using an Annual Required Rate of Return.
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "pe_ratio": data.get("ratio:priceEarningsRatio"),
        "%revenue_growth_rate": None,
        "%net_income_margin": None,
        "historical_years": 10,
        "projection_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate cost of equity
cost_of_equity = assumptions.get("%risk_free_rate") + assumptions.get("beta") * assumptions.get("%market_premium")
assumptions.set("%discount_rate", cost_of_equity)

# Compute metrics
data.compute({
    "%grossMargin": "income:grossProfit / income:revenue",
    "%operating_margin": "income:operatingIncome / income:revenue",
    "%netMargin": "income:netIncome / income:revenue",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "%netIncomeGrowthRate": "function:growth:income:netIncome",
    "%totalStockholdersEquityGrowthRate": "function:growth:balance:totalStockholdersEquity",

# Calculating NOPAT (Net Operating Profit After Taxes)
    "%taxRate": "income:incomeTaxExpense / income:incomeBeforeTax",
    "incomeTax": "income:operatingIncome * %taxRate",
    "nopat": "income:operatingIncome - incomeTax",

# Calculating Invested Capital
    "investedCapital": [
        "balance:totalNonCurrentAssets", "-", "balance:cashAndCashEquivalents", "+",
        "balance:totalCurrentAssets", "-", "balance:totalCurrentLiabilities"
    ],
    "%roic": "nopat / investedCapital",
})

data.set_default_range(f"{-assumptions.get('historical_years')}->0")

assumptions.set("%net_income_margin", data.average(f"%netMargin"))
assumptions.set_bounds(
    "%net_income_margin", low=0, high="100%"
)

assumptions.set("%revenue_growth_rate", data.average(f"%revenueGrowthRate"))
assumptions.set_bounds(
    "%revenue_growth_rate", low=0, high="25%"
)

# Compute forecasted values and ratios
data.compute({
    "income:revenue": f"""
        income:revenue:-1 * 
        (1 + {assumptions.get('%revenue_growth_rate')})
    """,
    "%revenueGrowthRate": "function:growth:income:revenue",
    "income:netIncome": f"income:revenue * {assumptions.get('%net_income_margin')}",
}, forecast=assumptions.get("projection_years"))

projected_revenue = data.get("income:revenue")
projected_net_income = data.get(f"income:netIncome:{assumptions.get('projection_years')}")

shares_outstanding = data.get("income:weightedAverageShsOut")
future_market_cap = assumptions.get("pe_ratio") * projected_net_income
discounted_future_market_cap = future_market_cap / (
            (1 + assumptions.get("%discount_rate")) ** assumptions.get("projection_years"))

stock_value = discounted_future_market_cap / shares_outstanding

# Set the final value
model.set_final_value({
    "value": stock_value,
    "units": "$"
})

# Render results
model.render_results([
    [stock_value, "Present Value", "$"],
    [projected_net_income, "Estimated net income", "$"],
    [future_market_cap, "Estimated market capitalization", "$"],
    [discounted_future_market_cap, "Market capitalization discounted to present", "$"],
    [shares_outstanding, "Shares Outstanding", "#"],
    [data.get("income:eps"), "Earnings Per Share (EPS)", "$"],
    [data.get("profile:price"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

# Render chart
model.render_chart({
    "data": {
        "income:revenue": "Revenue",
        "income:netIncome": "Net Income"
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": "Historical and forecasted data",
        "set_editable": [
            "income:revenue",
            "income:netIncome"
        ]
    }
})

# Render table for estimated future values
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Estimated Future Values",
        "order": "ascending",
        "number_format": "M"
    }
})

# Render historical values table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "income:costOfRevenue": "Cost of Revenue",
        "income:grossProfit": "Gross Profit",
        "%grossMargin": "Gross Margin",
        "income:operatingIncome": "Operating Income",
        "%operating_margin": "Operating Margin",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Render historical growth rates table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
        "%netIncomeGrowthRate": "Net Income Growth Rate",
        "balance:totalStockholdersEquity": "Stockholders Equity",
        "%totalStockholdersEquityGrowthRate": "Equity Growth Rate",
        "%roic": "Return on Invested Capital (ROIC)",
        "nopat": "After-tax Operating Income",
        "%taxRate": "Income Tax Rate",
        "investedCapital": "Invested Capital",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Growth Rates",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Set description for assumptions
assumptions.set_description({
    "%discount_rate": r"""
        ## Discount Rate

`Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium`

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

[Read More](https://www.investopedia.com/terms/c/costofequity.asp#mntl-sc-block_1-0-20)
    """,

"beta": r"""
        ## Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.
    """,

"%risk_free_rate": r"""
        ## Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
        By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.
    """,

"%market_premium": r"""
        ## Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.
    """,

"pe_ratio": r"""
        ## Price to Earnings (PE) Ratio

Estimated Price to Earnings (PE) Ratio at the end of the projection period.

`Future Market Cap` = `PE Ratio` * `Projected Net Income`
    """,

"%revenue_growth_rate": r"""
        ## Revenue Growth Rate

The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.
    """,

"%net_income_margin": r"""
        ## Net Income Margin

Net Income expressed as a percentage of Revenue.
    """,

"historical_years": r"""
        ## Historical Years

The number of historical years used to calculate averages for historical data.
    """,

"projection_years": r"""
        ## Projection Years

The number of years for projecting the analysis into the future.
    """,
})

print("End of model.")

Warnings

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Future Market Cap

Interactive Assumptions

Discount Rate Discount Rate Discount Rate `Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium` The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula. Read More	%
↳ Beta Beta Beta Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.	#
↳ Risk Free Rate Risk Free Rate Risk-Free Rate The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.	%
↳ Market Premium Market Premium Market Premium Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.	%
Pe Ratio Pe Ratio Price to Earnings (PE) Ratio Estimated Price to Earnings (PE) Ratio at the end of the projection period. `Future Market Cap` = `PE Ratio` * `Projected Net Income`	#
Revenue Growth Rate Revenue Growth Rate Revenue Growth Rate The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.	%
Net Income Margin Net Income Margin Net Income Margin Net Income expressed as a percentage of Revenue.	%
Historical Years Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	218.2 USD
Estimated net income	1.69 Bil. USD
Estimated market capitalization	75.23 Bil. USD
Market capitalization discounted to present	48.25 Bil. USD
Shares Outstanding	221.1 Mil.
Earnings Per Share (EPS)	1.79 USD
Market Price	24.99 USD
Price to Earnings (PE) Ratio	44.4

Historical and forecasted data

Monetary values in USD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "timeseries": "annual", "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [{"l": "2016", "x": "2016-12-31", "y": 1254373000}, {"l": "2017", "x": "2017-12-31", "y": 1479943000}, {"l": "2018", "x": "2018-12-31", "y": 958461000}, {"l": "2019", "x": "2019-12-31", "y": 1765438000}, {"l": "2020", "x": "2020-12-31", "y": 1764046000}, {"l": "2021", "x": "2021-12-31", "y": 4212091000}, {"l": "2022", "x": "2022-12-31", "y": 3055443000}, {"l": "2023", "x": "2023-12-31", "y": 3631884000}, {"l": "2024", "x": "2024-12-31", "y": 3884781000}, {"l": "2025", "x": "2025-12-31", "y": 6470140000}, {"l": "2026", "x": "2026-12-31", "y": 8087675000, "oy": 8087675000, "e": true, "d": 2026, "g": 25.0, "og": 25.0}, {"l": "2027", "x": "2027-12-31", "y": 10109593750, "oy": 10109593750, "e": true, "d": 2027, "g": 25.0, "og": 25.0}, {"l": "2028", "x": "2028-12-31", "y": 12636992187, "oy": 12636992187, "e": true, "d": 2028, "g": 25.0, "og": 25.0}, {"l": "2029", "x": "2029-12-31", "y": 15796240234, "oy": 15796240234, "e": true, "d": 2029, "g": 25.0, "og": 25.0}, {"l": "2030", "x": "2030-12-31", "y": 19745300292, "oy": 19745300292, "e": true, "d": 2030, "g": 25.0, "og": 25.0}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-12-31", "y": 111808000}, {"l": "2017", "x": "2017-12-31", "y": 76178000}, {"l": "2018", "x": "2018-12-31", "y": 57020000}, {"l": "2019", "x": "2019-12-31", "y": 148884000}, {"l": "2020", "x": "2020-12-31", "y": 152142000}, {"l": "2021", "x": "2021-12-31", "y": 408837000}, {"l": "2022", "x": "2022-12-31", "y": 167541000}, {"l": "2023", "x": "2023-12-31", "y": 474326000}, {"l": "2024", "x": "2024-12-31", "y": 463742000}, {"l": "2025", "x": "2025-12-31", "y": 527361999}, {"l": "2026", "x": "2026-12-31", "y": 694084268, "oy": 694084268, "e": true, "d": 2026, "g": 31.61, "og": 31.61}, {"l": "2027", "x": "2027-12-31", "y": 867605335, "oy": 867605335, "e": true, "d": 2027, "g": 25.0, "og": 25.0}, {"l": "2028", "x": "2028-12-31", "y": 1084506669, "oy": 1084506669, "e": true, "d": 2028, "g": 25.0, "og": 25.0}, {"l": "2029", "x": "2029-12-31", "y": 1355633336, "oy": 1355633336, "e": true, "d": 2029, "g": 25.0, "og": 25.0}, {"l": "2030", "x": "2030-12-31", "y": 1694541671, "oy": 1694541671, "e": true, "d": 2030, "g": 25.0, "og": 25.0}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-12-31": 16, "2027-12-31": 17, "2028-12-31": 18, "2029-12-31": 19, "2030-12-31": 20}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-12-31	2027-12-31	2028-12-31	2029-12-31	2030-12-31

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 Dec 31	LTM Mar 21	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31	2030 Dec 31
Revenue	6,470	5,862	8,088	10,110	12,637	15,796	19,745
Revenue Growth Rate	66.55%	-9.39%	25%	25%	25%	25%	25%
Net Income	527.4	527.4	694.1	867.6	1,085	1,356	1,695

Monetary values in USD

amounts except #

2025
Dec 31

LTM
Mar 21

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

2030
Dec 31

Revenue

6,470

5,862

8,088

10,110

12,637

15,796

19,745

Revenue Growth Rate

66.55%

-9.39%

25%

Net Income

527.4

694.1

867.6

1,085

1,356

1,695

Historical Values

Monetary values in USD amounts except #	Average	LTM Mar 21	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	3,122	5,862	6,470	3,885	3,632	3,055	4,212	1,764	1,765	958.5	1,480	1,254
Cost of Revenue	1,173	2,444	1,631	1,732	1,487	1,499	1,163	767.3	653.4	570.4	514.1	447.7
Gross Profit	1,948	3,419	4,839	2,153	2,145	1,557	3,049	996.8	1,112	388.1	965.8	806.6
Gross Margin	60.05%	58.32%	74.79%	55.42%	59.07%	50.95%	72.4%	56.51%	62.99%	40.49%	65.26%	64.31%
Operating Income	600.1	1,154	1,761	946.1	834	306.4	802	313.6	302.6	88.1	-89.26	182.8
Operating Margin	15.99%	19.68%	27.22%	24.35%	22.96%	10.03%	19.04%	17.78%	17.14%	9.19%	-6.03%	14.57%
Net Income	283.2	527.4	527.4	463.7	474.3	167.5	408.8	152.1	148.9	57.02	76.18	111.8
Net Margin	8.58%	9%	8.15%	11.94%	13.06%	5.48%	9.71%	8.62%	8.43%	5.95%	5.15%	8.91%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Mar 21	2025 Dec 31	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31
Revenue	3,122	5,862	6,470	3,885	3,632	3,055	4,212	1,764	1,765	958.5	1,480	1,254
Revenue Growth Rate	28.66%	-9.39%	66.55%	6.96%	18.87%	-27.46%	138.8%	-0.079%	84.2%	-35.24%	17.98%	54.02%
Net Income	283.2	527.4	527.4	463.7	474.3	167.5	408.8	152.1	148.9	57.02	76.18	111.8
Net Margin	8.58%	9%	8.15%	11.94%	13.06%	5.48%	9.71%	8.62%	8.43%	5.95%	5.15%	8.91%
Net Income Growth Rate	80.69%	0%	13.72%	-2.23%	183.1%	-59.02%	168.7%	2.19%	161.1%	-25.15%	-31.87%	477%
Stockholders Equity	2,000	4,275	4,275	3,544	1,893	1,589	1,825	1,194	768.3	587.9	1,460	591.6
Equity Growth Rate	27.38%	0%	20.65%	87.16%	19.14%	-12.93%	52.91%	55.37%	30.68%	-59.74%	146.8%	-38.91%
Return on Invested Capital (ROIC)	2.93%	3.75%	5.73%	4.62%	3.73%	1.51%	4.27%	2.16%	2.76%	0.899%	-1.61%	4.35%
After-tax Operating Income	513.5	975.6	1,490	824	725.8	263.2	691.1	268.1	265.4	72.71	-103	176
Income Tax Rate	10.66%	15.43%	15.43%	12.91%	12.98%	14.07%	13.83%	14.49%	12.32%	17.47%	-15.38%	3.7%
Invested Capital	14,862	25,998	25,998	17,817	19,442	17,467	16,194	12,413	9,612	8,089	6,398	4,051

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Ares Management Corporation Discounted Future Market Cap

Estimated Value

USD

Market Price USD

Discounted Future Market Cap

Interactive Assumptions

Discount Rate

Discount Rate

Beta

Beta

Risk Free Rate

Risk-Free Rate

Market Premium

Market Premium

Pe Ratio

Price to Earnings (PE) Ratio

Revenue Growth Rate

Revenue Growth Rate

Net Income Margin

Net Income Margin

Historical Years

Historical Years

Projection Years

Projection Years

Results

Historical and forecasted data

Estimated Future Values

Historical Values

Historical Growth Rates

Discounted Cash Flow to Firm - Perpetual Growth

Earnings Power Value

Simple Dividend Discount Model

Simple Excess Return Model

Two-Stage Dividend Discount Model

Two-Stage Excess Return Model

Discounted Cash Flow to Firm - Exit Multiple

Discounted Future Market Cap

Peter Lynch Fair Value

Altman Z-Score

Beneish M-Score

Capital Asset Pricing Model (CAPM)

Margin Analysis

Piotroski F-Score

Return on Invested Capital (ROIC)

Shiller PE (CAPE) Ratio

Weighted Average Cost of Capital (WACC)