Aramark (ARMK) Discounted Future Market Cap

Aramark

ARMK (NYSE)

(%)

Valuation
Aramark 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.")

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` = `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 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 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 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 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 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 expressed as a percentage of Revenue.	%
Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	25.2 USD
Estimated net income	333.3 Mil. USD
Estimated market capitalization	10.4 Bil. USD
Market capitalization discounted to present	6.63 Bil. USD
Shares Outstanding	263.2 Mil.
Earnings Per Share (EPS)	1.23 USD
Market Price	38.7 USD
Price to Earnings (PE) Ratio	31.21

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": "2016-09-30", "y": 14415829000}, {"l": "2017", "x": "2017-09-30", "y": 14604412000}, {"l": "2018", "x": "2018-09-30", "y": 15789633000}, {"l": "2019", "x": "2019-09-30", "y": 16227341000}, {"l": "2020", "x": "2020-09-30", "y": 12829559000}, {"l": "2021", "x": "2021-09-30", "y": 12095965000}, {"l": "2022", "x": "2022-09-30", "y": 13687269000}, {"l": "2023", "x": "2023-09-30", "y": 16083212000}, {"l": "2024", "x": "2024-09-30", "y": 17400701000}, {"l": "2025", "x": "2025-10-03", "y": 18506299000}, {"l": "2026", "x": "2026-10-03", "y": 19033728521, "oy": 19033728521, "e": true, "d": 2026, "g": 2.85, "og": 2.85}, {"l": "2027", "x": "2027-10-03", "y": 19576189784, "oy": 19576189784, "e": true, "d": 2027, "g": 2.85, "og": 2.85}, {"l": "2028", "x": "2028-10-03", "y": 20134111193, "oy": 20134111193, "e": true, "d": 2028, "g": 2.85, "og": 2.85}, {"l": "2029", "x": "2029-10-03", "y": 20707933362, "oy": 20707933362, "e": true, "d": 2029, "g": 2.85, "og": 2.85}, {"l": "2030", "x": "2030-10-03", "y": 21298109463, "oy": 21298109463, "e": true, "d": 2030, "g": 2.85, "og": 2.85}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2016", "x": "2016-09-30", "y": 287806000}, {"l": "2017", "x": "2017-09-30", "y": 373923000}, {"l": "2018", "x": "2018-09-30", "y": 567885000}, {"l": "2019", "x": "2019-09-30", "y": 448549000}, {"l": "2020", "x": "2020-09-30", "y": -461435000}, {"l": "2021", "x": "2021-09-30", "y": -90833000}, {"l": "2022", "x": "2022-09-30", "y": 194484000}, {"l": "2023", "x": "2023-09-30", "y": 674108000}, {"l": "2024", "x": "2024-09-30", "y": 262522000}, {"l": "2025", "x": "2025-10-03", "y": 326394000}, {"l": "2026", "x": "2026-10-03", "y": 297877851, "oy": 297877851, "e": true, "d": 2026, "g": -8.74, "og": -8.74}, {"l": "2027", "x": "2027-10-03", "y": 306367370, "oy": 306367370, "e": true, "d": 2027, "g": 2.85, "og": 2.85}, {"l": "2028", "x": "2028-10-03", "y": 315098840, "oy": 315098840, "e": true, "d": 2028, "g": 2.85, "og": 2.85}, {"l": "2029", "x": "2029-10-03", "y": 324079157, "oy": 324079157, "e": true, "d": 2029, "g": 2.85, "og": 2.85}, {"l": "2030", "x": "2030-10-03", "y": 333315413, "oy": 333315413, "e": true, "d": 2030, "g": 2.85, "og": 2.85}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2026-10-03": 16, "2027-10-03": 17, "2028-10-03": 18, "2029-10-03": 19, "2030-10-03": 20}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2026-10-03	2027-10-03	2028-10-03	2029-10-03	2030-10-03

↳ Growth Rate

Estimated Future Values

Monetary values in USD amounts except #	2025 Oct 03	LTM Feb 09	2026 Oct 03	2027 Oct 03	2028 Oct 03	2029 Oct 03	2030 Oct 03
Revenue	18,506	18,506	19,034	19,576	20,134	20,708	21,298
Revenue Growth Rate	6.35%	0%	2.85%	2.85%	2.85%	2.85%	2.85%
Net Income	326.4	326.4	297.9	306.4	315.1	324.1	333.3

Monetary values in USD

amounts except #

2025
Oct 03

LTM
Feb 09

2026
Oct 03

2027
Oct 03

2028
Oct 03

2029
Oct 03

2030
Oct 03

Revenue

18,506

19,034

19,576

20,134

20,708

21,298

Revenue Growth Rate

6.35%

2.85%

Net Income

326.4

297.9

306.4

315.1

324.1

333.3

Historical Values

Monetary values in USD amounts except #	Average	LTM Feb 09	2025 Oct 03	2024 Sep 30	2023 Sep 30	2022 Sep 30	2021 Sep 30	2020 Sep 30	2019 Sep 30	2018 Sep 30	2017 Sep 30	2016 Sep 30
Revenue	15,468	18,506	18,506	17,401	16,083	13,687	12,096	12,830	16,227	15,790	14,604	14,416
Cost of Revenue	14,118	17,084	17,436	15,975	14,775	12,616	11,007	11,994	14,533	13,998	12,995	12,890
Gross Profit	1,349	1,422	1,070	1,426	1,309	1,072	1,089	835.9	1,695	1,792	1,609	1,525
Gross Margin	8.78%	7.69%	5.78%	8.19%	8.14%	7.83%	9%	6.51%	10.44%	11.35%	11.02%	10.58%
Operating Income	592.2	791.8	791.8	706.5	625	415.4	191.4	-264.9	891.2	818.4	801.6	746.3
Operating Margin	3.67%	4.28%	4.28%	4.06%	3.89%	3.03%	1.58%	-2.07%	5.49%	5.18%	5.49%	5.18%
Net Income	264.5	326.4	326.4	262.5	674.1	194.5	-90.83	-461.4	448.5	567.9	373.9	287.8
Net Margin	1.57%	1.76%	1.76%	1.51%	4.19%	1.42%	-0.751%	-3.6%	2.76%	3.6%	2.56%	2%

Historical Growth Rates

Monetary values in USD amounts except #	Average	LTM Feb 09	2025 Oct 03	2024 Sep 30	2023 Sep 30	2022 Sep 30	2021 Sep 30	2020 Sep 30	2019 Sep 30	2018 Sep 30	2017 Sep 30	2016 Sep 30
Revenue	15,468	18,506	18,506	17,401	16,083	13,687	12,096	12,830	16,227	15,790	14,604	14,416
Revenue Growth Rate	2.85%	0%	6.35%	8.19%	17.5%	13.16%	-5.72%	-20.94%	2.77%	8.12%	1.31%	0.605%
Net Income	264.5	326.4	326.4	262.5	674.1	194.5	-90.83	-461.4	448.5	567.9	373.9	287.8
Net Margin	1.57%	1.76%	1.76%	1.51%	4.19%	1.42%	-0.751%	-3.6%	2.76%	3.6%	2.56%	2%
Net Income Growth Rate	-27.7%	0%	24.33%	-61.06%	246.6%	-314.1%	-80.32%	-202.9%	-21.01%	51.87%	29.92%	21.98%
Stockholders Equity	2,955	3,148	3,148	3,039	3,713	3,030	2,723	2,736	3,320	3,030	2,459	2,161
Equity Growth Rate	5.68%	0%	3.59%	-18.15%	22.55%	11.27%	-0.479%	-17.59%	9.59%	23.2%	13.79%	14.74%
Return on Invested Capital (ROIC)	5.06%	6.59%	6.59%	6.51%	5%	2.97%	1.21%	-1.74%	6.66%	8.95%	6.86%	6.05%
After-tax Operating Income	479.2	601.3	601.3	507.1	495.9	341.2	132.9	-188.7	718.6	985.9	576.1	499.2
Income Tax Rate	21.31%	24.06%	24.06%	28.22%	20.66%	17.86%	30.59%	28.76%	19.37%	-20.46%	28.13%	33.11%
Invested Capital	9,790	9,119	9,119	7,788	9,914	11,467	10,986	10,856	10,784	11,015	8,399	8,245